Trump’s Tariff Threat Sparks $16B in Crypto Long Liquidations as Markets Reel
A renewed wave of trade war fears sent crypto markets tumbling Friday after former U.S. President Donald Trump warned of 100% tariffs on Chinese imports, triggering a massive $16 billion liquidation of leveraged long positions and briefly pushing Ethena’s USDe below its $1 peg.
The sell-off swept across global markets during Asian trading hours, as investors fled risk assets following Trump’s Truth Social post. The shock quickly spilled into digital assets, causing one of the largest liquidation events the crypto market has seen this year.
Bitcoin plunged under $110,000 before bouncing to $113,294, while Ether recovered to $3,844. The CoinDesk 20 Index sank 12.1%, with losses stretching across nearly all major tokens. Total crypto market capitalization fell to $3.87 trillion, CoinGlass data showed. Of the $19.1 billion in total liquidations, around $16.7 billion came from long positions.
Ethena’s USDe momentarily slipped to $0.9996, reflecting brief stress in derivatives markets amid the violent swings. The Ethena team confirmed that minting and redemptions continued normally and noted that USDe’s overcollateralization actually increased as short-side gains were realized during the downturn.
Friday’s sell-off marked crypto’s largest-ever liquidation in dollar terms, surpassing the 2022 FTX implosion and the COVID-era crash by more than tenfold. However, in percentage terms, the correction was smaller due to the sector’s significant growth since 2022.
CoinGlass added that the true liquidation figure may be higher, as Binance’s data typically reports with a delay.
Meanwhile, a U.S. government shutdown has halted key economic data releases, adding to uncertainty as markets navigate without official indicators and trade tensions once again dominate global sentiment.
