The cryptocurrency market faced a brutal crash, with Bitcoin (BTC), XRP, Solana (SOL), and Ethereum (ETH) suffering massive losses. In one of the steepest market declines in recent memory, the global crypto market valuation dropped by 12%—the first time in over a year.
Bitcoin Leads the Crash
Bitcoin plunged 8%, trading above $93,100, according to Binance data. The impact rippled across the market, triggering over $2.2 billion in liquidations—the highest recorded this year and one of the biggest ever on Coinglass. A staggering 729,728 traders were liquidated, with the largest single liquidation occurring on Binance, an ETH/BTC trade valued at $25.64 million.
Altcoins Face Devastating Losses
The fallout didn’t stop at Bitcoin. Major altcoins like Cardano (ADA), Dogecoin (DOGE), and XRP saw declines exceeding 25%, dragging them to price levels last seen before the U.S. elections in early November. The past month has witnessed a 40–50% dip across most leading cryptocurrencies, marking one of the worst downturns in recent crypto history.
Trade War Sparks Chaos in the Crypto Market
The ongoing U.S. trade war played a significant role in this market meltdown. President Donald Trump’s recent tariffs—25% on imports from Canada and Mexico and 10% on Chinese goods—have sent shockwaves through global trade and the cryptocurrency sector.
While these tariffs were primarily directed at traditional industries, the crypto mining sector has also been hit hard. U.S.-based crypto miners rely heavily on mining equipment from China, including GPUs and ASIC miners produced by companies like Bitmain and Canaan. Rising import costs could significantly impact their operational expenses, potentially driving mining costs higher and reducing profitability.
Global Response to U.S. Tariffs
The international response to Trump’s tariffs has only added fuel to the fire. Canadian Prime Minister Justin Trudeau retaliated by imposing a 25% tariff on American goods, stating that Canada will not back down. Similarly, Mexican President Claudia Sheinbaum announced retaliatory measures, confirming that Mexico has implemented its own tariffs in response to Trump’s aggressive trade policies.
Sheinbaum emphasized that while negotiations had been attempted, escalating tensions between the U.S. and Mexico led to an unavoidable trade conflict. This global economic uncertainty has further rattled investor confidence, contributing to the sharp decline in the crypto market.
Conclusion: What’s Next for Crypto?
With the market in turmoil, investors are left wondering what comes next. If tensions persist and trade restrictions continue to impact crypto mining operations, the market could experience prolonged volatility. However, long-term holders and institutional investors may view this dip as a strategic entry point.
For now, traders should brace for more turbulence as geopolitical and economic factors continue to shape the trajectory of the crypto market. Whether this crash is a short-term setback or the start of a prolonged bearish cycle remains to be seen.