Crypto Markets Plummet as Trump’s Tariffs Spark Panic: $2.3B Liquidated in 24 Hours

The cryptocurrency market has been rocked by a new wave of volatility following former U.S. President Donald Trump’s latest tariff announcement. In just 24 hours, the market saw a staggering $2.3 billion in liquidations, as fear rippled through investors and traders alike.

Massive Sell-off Hits Bitcoin and Altcoins

Bitcoin (BTC) took a sharp 4% hit, dropping to $95,800, while Ethereum (ETH) nosedived 17% to $2,590. XRP followed suit with an 18% drop to $2.38. The overall crypto market capitalization shrank by 9%, sinking to $3.2 trillion, according to CoinGecko.

Data from CoinGlass shows this market turmoil has led to one of the largest liquidation events in recent months. “External pressures — like the U.S. escalating tariffs on Mexico, Canada, and China — are rattling global markets and spilling into crypto,” said Saul Rejwan, managing partner at crypto investment firm Masterkey VC, in an interview with DL News.

BitGalactic’s Take: What This Means for Crypto’s Future

At BitGalactic, we recognize that while Bitcoin and other cryptocurrencies are often hailed as a hedge against inflation, they remain susceptible to global macroeconomic shifts. This latest crash is a clear example of how external policy decisions—particularly from major economies—can send shockwaves through decentralized markets.

“The market’s knee-jerk reaction to tariffs underscores how interconnected traditional finance and crypto still are,” says BitGalactic’s lead analyst. “Despite narratives of Bitcoin being ‘digital gold,’ it remains highly sensitive to liquidity conditions and risk sentiment.”

Trump’s Trade War 2.0: The Impact on Global Markets

Trump’s proposed tariffs—25% on Canada and Mexico, and 10% on China—are set to take effect on Tuesday. Investors are wary of the economic consequences, particularly inflationary pressures that could disrupt global trade flows.

During the 2024 presidential campaign, economists warned that Trump’s aggressive economic policies could create significant turbulence. Despite those concerns, markets initially rallied post-election, with Bitcoin hitting an all-time high above $100,000 in December. However, the latest tariff news has shifted sentiment into a ‘risk-off’ mode, with Nasdaq futures down 1.8% and S&P 500 futures sliding 1.6%.

More Volatility Ahead?

Looking ahead, industry experts warn that crypto could remain in choppy waters. “Until the next major macro event—whether it’s a regulatory shift, ETF inflows, or new geopolitical developments—crypto is likely to stay volatile,” Rejwan added.

BitGalactic echoes this sentiment, emphasizing that while downturns can be painful, they also present opportunities. “Smart investors will be looking for key accumulation zones. Historically, Bitcoin has thrived in uncertainty, and those who understand market cycles could find themselves in a strong position when the dust settles.”

For now, all eyes are on how global markets react to these tariffs and whether crypto can decouple from traditional financial shocks—or if it remains tightly tethered to broader economic movements.