The Customs Duty Crisis on Chinese Imports Shakes the Markets

Market Chaos: Bitcoin and Ethereum on the Decline

US President Donald Trump's threat of a 100% tariff on China shook financial markets worldwide. With investors fleeing from risk, Bitcoin fell below $103,000 early Saturday morning, experiencing significant value loss. After rising above $126,000 at the beginning of the week, Bitcoin failed to show a considerable rebound following this crash.

The Impact of Trade Wars on the Crypto Market

Trump's statements on social media increased investor concerns. In particular, the expectation that trade wars may reignite eroded confidence in cryptocurrencies. Bitcoin, Ethereum, and other digital assets experienced significant value loss, recording some of the largest declines of the year.

Liquidations and Market Reaction

The market crash led to the liquidation of over $19 billion in leveraged positions. Of these liquidations, $16.7 billion came from long positions, marking one of the worst liquidations in the history of cryptocurrencies in terms of volume. Compared to the FTX collapse in 2022 or the declines experienced during the COVID-19 period, the current crash resulted in 10 times more liquidation in value for Bitcoin and other crypto assets. However, the increase in market size has made these losses appear less significant.

Volatility in Stablecoins and Market Uncertainty

The Ethereum-based stablecoin USD e briefly dropped to $0.9996. This situation illustrated how fluctuations in the derivatives market can impact fixed rates. The Ethena team emphasized that despite the volatility, the minting and redemption of USD e continued uninterrupted. However, the potential government shutdown in the US continues to raise uncertainty in the markets by delaying the release of economic data.