The cryptocurrency market lost over $19 billion in what has been described as “the largest liquidation event in crypto history” after US-China trade tensions escalated following US President Donald Trump’s announcement to impose additional 100 per cent tariffs on Chinese goods.
Bitcoin, the largest cryptocurrency, lost more than 12 per cent after touching an all-time high of $125,000 earlier in the week, a leading US-based news agency reported. By Sunday, Bitcoin was trading at $1,11,122.51, down 1 per cent over the past 24 hours and 10.38 per cent over the past seven days, as per data on CoinMarketCap.
Market cap was also down close to 0.90 per cent to $2.22.21 trillion, with trading volumes down 45.84 per cent over the past 24 hours to $94.71 billion.
Ethereum, another major cryptocurrency, also suffered record liquidations as traders rushed to exit positions and moved funds into stablecoins or safer assets. It was trading at was at $3,798, down 0.39 per cent from the previous day, with market cap at $458.43 billion and trading volume down 50 per cent to $54.44 billion.
Also Read: Bitcoin hits all-time high on gains in US equities
By October 12, cryptocurencies market capitalisation was down to $3.7 trillion from record $4 trillion seen last week. The trading volume was at $250.02 billion, according to CoinMarketCap data.
Data tracker Coinglass reported that that more than 1.6 million traders were liquidated in the last 24 hours, with over $7 billion of positions sold in less than one hour on Friday, adding that the total losses could well be significantly higher.
Any further drop in the Bitcoin, especially below the $100,000-mark, warned traders, would signal the end of the past three-year bull cycle.
Some have placed total liquidations above $30 billion, saying the focus would now be on "counterparty exposure and whether this triggers broader market contagion”.
US-China trade war rattled the stock markets as well, leading to a crash, while demand for safer assets like Treasuries and gold escalated.
Analysts said the crash also highlighted crypto’s sensitivity to macroeconomic developments, with David Jeong, CEO of algorithmic trading platform Tread.fi, calling the event a ‘black swan’.
"The rout was sparked by US-China tariff fears but fuelled by institutional over-leverage,” said Vincent Liu, chief investment officer at Kronos Research.
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