While crypto enthusiasts were busy posting rocket emojis last week, the digital currency market went into freefall. The crash wiped out a staggering $40 billion, with Bitcoin plummeting over 9% to $91,200. Not your average market hiccup. A record-breaking $2.2 billion got liquidated in less than 24 hours—the worst single-day bloodbath in crypto history.
Crypto’s rocket emojis quickly turned to tears as Bitcoin crashed 9% in a $40 billion market meltdown.
What triggered this financial nightmare? President Trump’s surprise tariff announcement on Truth Social. He declared major tariffs against America’s three biggest trading partners: Canada, Mexico, and China. Markets hate surprises. Especially ones that threaten inflation and higher interest rates. When inflation goes up, institutional investors run for safer havens. Goodbye risky crypto, hello boring treasury bonds.
Bitcoin traders took a brutal hit. They accounted for 18% of the $2.25 billion in liquidations. Long traders lost $341 million while shorts lost about $70 million. Talk about pain. Binance users alone watched $121 million evaporate from their accounts.
Other cryptocurrencies fared even worse. Ethereum dropped over 11%. Solana plunged 15%. XRP fell 12%. And poor Cardano tanked a horrifying 20%, trading near $0.80. The entire crypto market cap shrank by 10% to $2.77 trillion. That’s $300 billion—gone. The severe price swings demonstrated yet again how market sentiment can dramatically amplify cryptocurrency volatility. The situation echoes the dramatic fall of Bitcoin from its peak of nearly $69,000 in 2021, creating what many analysts describe as another “crypto winter.”
Traditional markets weren’t spared either. The S&P 500 slid 2%. The Dow Jones tumbled 650 points. China quickly announced retaliatory tariffs on US imports. Just like that, fears of a global trade war reignited. The economic uncertainty pushed investors away from cryptocurrencies despite their traditional appeal during times of inflation concerns.
Some critics aren’t buying the coincidence. They’re accusing Trump of orchestrating a pump-and-dump scheme after positioning himself as crypto-friendly. Economist Peter Schiff even called for a Congressional investigation. Were insiders tipped off? Nobody knows.
What’s next for crypto? More volatility, probably. The future of US Crypto Strategic Reserves looks shaky at best. But the industry’s seen crashes before. As some traders panic-sell, others are already eyeing the dip. Classic crypto.
