Johannesburg, South Africa – The crypto market experienced a dramatic crash on Friday, wiping out nearly $280 billion in market capitalisation. Bitcoin (BTC) took a significant hit, briefly plummeting nearly 10% below the R1,944,000 mark (approximately $108,000) after US President Donald Trump announced plans to sharply increase tariffs on Chinese goods.
Trump's Trade War Triggers Crypto Sell-Off
Trump's announcement on Truth Social outlined a potential doubling of tariffs on Chinese imports, starting November 1st. He accused China of “hostile” actions and attempts to dominate the market through export controls on rare-earth metals. The threat of further countermeasures sent shockwaves through the crypto world.
"One of the policies that we are calculating at this moment is a massive increase of tariffs on Chinese products coming into the United States of America," Trump stated.
Altcoins Suffer Heavy Losses
The downturn wasn't limited to Bitcoin. Altcoins also experienced substantial losses. Ethereum (ETH) dropped by 18%, XRP by a staggering 32%, and Solana (SOL) by 20%. These sharp pullbacks highlight the interconnectedness of the crypto market and its vulnerability to global economic events.
- Ethereum (ETH): -18%
- XRP: -32%
- Solana (SOL): -20%
Memecoins and AI Tokens Crushed
The pain extended beyond major cryptocurrencies. The memecoin category plunged by 35%, while the Artificial Intelligence (AI) sector saw a 30% decline. This widespread negativity triggered heavy long liquidations, briefly crashing the Coinglass liquidation data platform.
Adding fuel to the fire, data from Lookonchain revealed that a prominent Bitcoin OG wallet had opened $1.1 billion in short positions on BTC and ETH prior to the crash, realizing unrealized profits exceeding $27 million. This suggests that some market participants anticipated the downturn and profited from it.
The crypto market crash mirrors a broader decline observed across other risk assets, including stocks, demonstrating the sensitivity of these markets to geopolitical and economic uncertainty.