Onome Amuge
The global cryptocurrency market endured one of its most punishing days on record after U.S. President Donald Trump announced a 100 per cent tariff on all Chinese software and technology imports, sparking a rapid sell-off that erased nearly $1 trillion in digital asset value within 24 hours.
The crash, which began late Friday evening after Trump’s post on his Truth Social account, caught investors off guard. With U.S. markets closed and liquidity thin, panic spread quickly across Asia and Europe before cascading into global exchanges. Bitcoin plunged from above $125,000 to just under $104,000 in a matter of hours, while Ethereum dropped 11 per cent to around $3,878. Other altcoins , including XRP, Dogecoin, and Cardano, suffered declines of up to 30 per cent, in what traders described as a chain reaction of leveraged liquidations.
According to data from CoinGlass, more than $20 billion in leveraged positions were liquidated within 24 hours, marking the largest single-day liquidation in crypto history. Approximately 1.6 million traders were forced to close positions, most of them long bets on Bitcoin and Ethereum.
The Brand Strength Measurement Index equivalent for crypto, known in market terms as open interest, dropped by nearly 40 per cent overnight, a sign that speculative excess was being flushed from the system.
Despite the sharp correction, analysts are quick to classify the event as a liquidity reset, not a structural collapse. “The sell-off was mechanical. “It had little to do with blockchain fundamentals and everything to do with macro panic,” said Daniel Parreira, senior vice president for Africa at Thunes, a global payments network.
Bitcoin has since recovered slightly to around $111,800 at the time of filing this report, stabilising after what traders call an “overreaction” to Trump’s trade announcement.
The crash began almost immediately after Trump’s declaration that Washington would impose 100 per cent tariffs on ‘any and all critical software’ from China, citing Beijing’s new export controls on rare earth elements.
In his statement, Trump accused China of taking an unprecedented position by restricting the export of materials vital to global technology manufacturing. The move, he said, left the U.S. with no choice but to respond in kind.
“Starting November 1st, 2025, or sooner depending on China’s actions, the United States of America will impose a tariff of 100% on China,” the president wrote.
China’s Ministry of Commerce had earlier announced that exporters must obtain special licenses for products containing more than 0.1 per cent of rare earth materials, a rule interpreted as a strategic counter to U.S. semiconductor restrictions.
The White House’s retaliation reignited fears of a renewed U.S.-China trade war, sending Wall Street tumbling as well. The S&P 500 fell 2.7 per cent, the Dow Jones lost 878 points, and the Nasdaq Composite slid 3.6 per cent, marking their heaviest declines since April.
Crypto’s reaction, however, was far more violent than equities. Because the market operates 24/7 and is heavily dependent on speculative leverage, the timing of Trump’s announcement, after U.S. trading hours, proved disastrous.
“The crypto market reacted in a more extreme way than the stock market because it’s always on. There was no circuit breaker, no pause for reflection. Once margin calls started, it became self-reinforcing,” Duckett noted.
Yet even amid the carnage, market analysts argue the event shows how crypto is evolving from a speculative corner of finance into a complex, macro-sensitive asset class.
“This wasn’t irrational behavior. Bitcoin now trades like a high-beta macro asset — it reacts to global trade policy, inflation data, and central bank signals. That’s a sign of integration, not immaturity,” said Chris Mellor, head of ETF product management at Invesco.
Institutional participation in the market remains robust. Hedge funds, corporations, and even pension funds continue to accumulate Bitcoin, viewing it as a long-term hedge against monetary instability. Data from Glassnode shows that institutional wallets now control over 70 per cent of circulating Bitcoin supply, a record high.
Nigel Green, CEO of DeVere Group, described the sell-off as a reset, not a retreat.
“Investors are no longer treating Bitcoin as a curiosity. This volatility is productive;it clears excess leverage and resets the base for a stronger market. The hands holding Bitcoin have become stronger, more institutional, and more patient,” he said.
The sell-off came just days after the U.K. lifted its ban on crypto exchange-traded notes (ETNs) for retail investors, a move widely viewed as an attempt to make London a competitive global crypto hub.
ETNs are financial instruments that give exposure to digital assets via regulated exchanges. But within hours of the ban being lifted, Hargreaves Lansdown, the U.K.’s largest retail investment platform, issued a sharp warning.
“The HL Investment view is that Bitcoin is not an asset class. We do not think cryptocurrency has characteristics that mean it should be included in portfolios for growth or income,” the firm said.
Still, the firm acknowledged that it would allow “appropriate clients” to speculate in crypto ETNs from early 2026.
Critics warn that the U.K.’s policy shift could expose inexperienced investors to extreme volatility , precisely the kind seen after Trump’s announcement.
“Opening ETNs to retail traders days before a trillion-dollar drawdown is ironic. It shows how regulators are perpetually a step behind the market’s risk cycle,” said Sophie Larkin, an analyst at Pantera Capital.
Despite the bloodbath, several long-term indicators remain intact. The Bitcoin halving, which reduces block rewards and historically precedes major bull runs, is expected in mid-2026. Institutional accumulation continues to outpace miner distribution, a signal of confidence in the asset’s long-term value.
Meanwhile, Ethereum’s transition to a proof-of-stake model and its growing role in decentralized finance (DeFi) continue to attract investor interest. “Ethereum has decoupled slightly from Bitcoin volatility,” noted CRYPTOWZRD, an independent market analyst.
DeFi activity also remains resilient, with total value locked (TVL) holding steady near $90 billion, despite the price shocks. Stablecoin demand increased during the crash, particularly for USDT and USDC, as traders sought safety amid chaos.
For now, one fact is undeniable: the cryptocurrency market has entered a new phase, one defined not by youthful speculation but by macro sensitivity, institutional depth, and geopolitical exposure. In that sense, its violent reaction to Trump’s tariffs may not mark its weakness — but its arrival on the world’s main economic stage.
