(Bloomberg) — Cryptocurrencies tumbled after US President Donald Trump said he would impose an additional 100% tariff on China and export controls on software, with more than $6 billion in positions liquidated within the past hour.
The wipeout is the largest since at least early April. Bitcoin, the largest cryptocurrency fell more than 12% after the announcement was made on Trump’s Truth Social platform, before paring the decline. Bitcoin, which recently traded at around $112,000, had reached an all-time high of more than $126,250 on Monday.
“A renewed trade war between China and the US erupted on Friday, causing uncertainty in markets and a rout in risk assets,” said Ravi Doshi, co-head of markets at prime broker FalconX. The firm’s derivatives desk saw outsized demand for downside protection throughout the day, he said.
Over $7.4 billion in bets on cryptoassets has been wiped out in the past 24 hours with around $6.7 billion and $695 million in long and bearish positions, according data from Coinglass. The liquidations are accelerating with around $6.6 billion in the past four hours after Trump’s announcement.
Smaller, less liquid tokens, were hit harder. Ether slumped more than 17%, while XRP and Dogecoin tumbled over 30%.
Flaring trade tensions between the US and China sent shockwaves across markets Friday, hammering stocks, oil and crypto while spurring a dash for the perceived safety of Treasuries and gold.
The declaration came after Trump earlier Friday threatened trade actions against China, citing “hostile” export controls Beijing placed on rare-earth minerals. Trump also said there seemed to be “no reason” to follow through with a planned meeting with the country’s leader, Xi Jinping, on the sidelines of the APEC summit in South Korea later this month.
Market ebullience had been so pronounced as of late that investors were flocked into everything from stocks to bonds and cryptocurrencies.
(An earlier update corrected the reference to Truth Social in second paragraph.)
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