Crypto traders, banking on a consistent upward trajectory for Bitcoin, faced a stark wake-up call as Donald Trump’s latest tariff threats sent shockwaves through the market. Within a mere four hours, over $300 million in leveraged derivatives positions crumbled across centralized exchanges, CoinGlass data reveals, as digital currencies took a nosedive. The near-totality of these liquidations struck long positions—bets placed on rising prices. Bitcoin alone accounted for $107 million of the total, with Ethereum’s ether following closely at $87 million. Other tokens, including Solana’s SOL, Dogecoin’s DOGE, and SUI, each saw liquidations in the range of $10 to $18 million.
Tariff Turbulence and Its Ripple Effects
The catalyst? Trump’s surprising proposal of a hefty 50% tariff on European Union imports starting in June 2025, coupled with a 25% levy on iPhones produced outside the U.S. This announcement stoked fears of rekindling a long-dormant trade war. The market’s reaction was swift and unforgiving, with Bitcoin and major altcoins like Ether, XRP, and Cardano ADA shedding 3% to 4% of their value. Smaller-cap tokens, such as Uniswap and SUI, weren’t spared, experiencing declines of 5% to 7% over the past day. This follows a pattern observed in Bitcoin Traders Eye Breakout to New Highs as Trump Says Tariff Deals Progressing, where market sentiment shifted rapidly due to geopolitical developments.
“The markets stumbled—not for the first time—due to headline-driven volatility,” noted Skew, a well-regarded crypto trader, in an X post early Friday. He added that the “nice aggregate flush of long leverage and de-risk selling from spot” underscored the market’s vulnerability to external shocks, especially those emanating from political arenas.
High-Stakes Bets and Market Sentiments
Among the traders caught in the maelstrom was James Wynn, who recently gained notoriety for opening a staggering $1.1 billion long bet on Bitcoin with 40x leverage on the Hyperliquid exchange. As it stands, Wynn faces $7.5 million in unrealized losses, with the specter of liquidation looming if Bitcoin dips to $102,000, according to a screenshot he shared on X.
This turmoil unfolded amid an intriguing shift toward short positions in Bitcoin derivatives, even as the cryptocurrency flirted with record highs. CoinDesk reported on Thursday that this tilt suggested a growing skepticism about Bitcoin’s sustainability at its current peak, raising questions about the underlying market dynamics. Interestingly, this skepticism contrasts with recent optimism noted in Bitcoin Jumps Above $97K as Traders Optimistic U.S.-China Trade Deal Possible, highlighting the market’s unpredictable nature.
Historical Context and Future Implications
This isn’t the first time the crypto market has been whipsawed by geopolitical developments. Historical patterns suggest that such events can have cascading effects, as traders scramble to adjust their positions and hedge against unforeseen risks. The latest episode serves as a reminder of the crypto market’s susceptibility to external pressures, which can swiftly alter the landscape.
Looking ahead, the key question is whether the market can absorb these shocks and stabilize, or if further volatility is on the horizon. The proposed tariffs could strain international relations and impact global trade flows, with potential knock-on effects for the broader financial markets. This uncertainty adds another layer of complexity for traders navigating an already unpredictable environment.
As investors assess their strategies, the resilience of the crypto market will be tested once more. Will it weather the storm, or are more turbulent times ahead? Only time will tell, but one thing is certain: in the world of crypto, the only constant is change.
Source
This article is based on: Crypto Market Sees $300M Liquidations as Trump Tariff Threats Flush Late Bulls
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
