Record $16B in Crypto Longs Liquidated as Market Chaos Engulfs Traders

Trump’s Tariff Threat Triggers $16B Crypto Meltdown as USDe Slips Below Peg

Global crypto markets suffered a sharp sell-off Friday after former U.S. President Donald Trump threatened to impose 100% tariffs on Chinese goods, reigniting trade war fears and wiping out over $16 billion in leveraged long positions.

The downturn, which gathered pace during Asian trading hours, followed Trump’s post on Truth Social warning of sweeping tariffs on Chinese imports. The message sent shockwaves through global risk assets, sparking a broad sell-off that cascaded into digital assets and triggered one of the year’s largest liquidation events.

Bitcoin briefly tumbled below $110,000 before rebounding to $113,294, while Ether recovered to $3,844. The CoinDesk 20 Index fell 12.1%, highlighting the depth of losses across major tokens. Total crypto market capitalization shrank to $3.87 trillion, with $16.7 billion of the $19.1 billion in liquidations coming from long traders, according to CoinGlass.

Ethena’s algorithmic stablecoin USDe briefly traded as low as $0.9996 amid the turmoil — a minor depeg that underscored the stress in derivatives markets. Despite the volatility, Ethena Labs confirmed that redemptions and minting continued without disruption and noted that USDe’s collateral ratio actually strengthened as short-side profits were realized.

Friday’s liquidation volume was the largest in crypto’s history in nominal terms, exceeding the 2022 FTX crash and the pandemic-era sell-off by more than tenfold. However, relative to total market size, the move was less severe — underscoring the sector’s expansion over the past three years.

CoinGlass cautioned that actual liquidation figures may be even higher, citing delays in reporting from Binance, the world’s largest exchange.

Market uncertainty has been compounded by the ongoing U.S. government shutdown, which has stalled the release of key economic indicators, leaving traders without official guidance as trade tensions re-emerge on the global stage.

About The Author

ctleditor

See author's posts