Crypto markets experienced a significant downturn following President Donald Trump’s early October announcement of a potential 100% tariff on imports from China to the U.S. This highlighted the uncertainty and volatility of cryptocurrency markets.
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On Friday, October 10, the cryptocurrency market saw a severe decline, resulting in billions of dollars lost. The panic among investors was triggered by Trump’s tariff threats, leading many to sell off riskier assets like cryptocurrencies. According to data analysis from CoinGlass, this was the largest liquidation event in cryptocurrency history, amounting to a total liquidation of $19.13 billion.
Additionally, as CNN reported, many crypto traders were heavily leveraged, meaning they borrowed money to amplify their investments. When prices fell, these leveraged trades exacerbated the sell-off. The market capitalization of cryptocurrency plummeted from $4.1 trillion to $3.6 trillion.
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Shortly after the crash, the market cap began to show signs of recovery. Reports on October 27 noted that Trump and Chinese President Xi had made significant progress in their trade discussions, potentially leading to a rollback of tariffs. Following this news, the crypto market rebounded by 3%-5%.
However, experts warn that such market volatility is likely to persist. Economic uncertainty will continue to make cryptocurrencies a target for rapid sell-offs by anxious investors. John Paton, a marketing director, highlighted that investors often view crypto as a risky investment and tend to sell quickly in uncertain times.
