TLDR
- Trump imposed new tariffs including 10% minimum on all US importers with higher rates for major trading partners
- Bitcoin reached $88,500 before dropping to around $83,500, with similar drops in Ethereum and other cryptocurrencies
- Market volatility led to approximately $450-500 million in crypto futures liquidations
- Both long ($257M) and short ($232M) positions were affected almost equally
- Despite short-term volatility, some analysts remain optimistic about Bitcoin’s long-term prospects
Trump Tariffs Rock Crypto Markets, Triggering Mass Liquidations
President Donald Trump’s new tariff announcement has sent shockwaves through cryptocurrency markets, causing Bitcoin to drop from recent highs and triggering hundreds of millions in liquidations. The tariffs, which include a minimum 10% duty on all US imports and higher rates for major trading partners, have created market uncertainty that affected both bullish and bearish positions.
Bitcoin briefly touched $88,500 before dropping to around $83,500 following the announcement. Ethereum fell from $1,934 to under $1,800, while the total crypto market cap decreased by about $200 billion from its peak during after-hours trading.
BTC Price
The market turmoil led to approximately $450-500 million in crypto futures liquidations within 24 hours. About 159,000 traders were affected, with the largest single liquidation being a $12 million ETHUSDT position on Binance.
Global Response Awaited
The new tariffs hit all countries with at least a 10% rate starting April 5, but some nations face much steeper penalties. China will face a 34% tariff, the European Union 20%, and Japan 24%. Auto imports will see a 25% tariff across the board.
During his April 2 speech, Trump claimed the US is charging countries “approximately half of what they are and have been charging us.” He declared a national emergency as part of this trade policy shift.
🚨 @POTUS signs an Executive Order instituting reciprocal tariffs on countries throughout the world.
It's LIBERATION DAY in America! pic.twitter.com/p7UnfE617B
— Rapid Response 47 (@RapidResponse47) April 2, 2025
Market experts are now watching for global responses. Mexico and key East Asian economies like China, South Korea, and Japan may be considering countermeasures. US Treasury Secretary Scott Bessent urged trading partners against taking retaliatory steps, suggesting the current rates could represent a “ceiling” if countries don’t impose additional levies in response.
Market Sentiment Turns Fearful
The crypto market initially showed some positive movement at the news of a 10% sweeping tariff. This was short-lived once the full scope of the tariffs became known.
The Crypto Fear & Greed Index, which measures market sentiment, returned a score of 25 in its latest update. This puts the market in “extreme fear” territory, down from an average rating of “fear” over the previous week.
Stock markets also took a hit. The S&P 500 reportedly erased over $2 trillion in market cap following the tariff announcement.
Rachael Lucas, a crypto analyst at Australian exchange BTC Markets, called the brief price surge a case of “uncertainty relief” before a sell-off as the full tariff details emerged. She noted that trading volume surged 46% on their platform as traders worked to reposition themselves.
Large traders took profit during the initial price spike. Many smaller investors hesitated to make moves during the volatility.
In the liquidation data, bitcoin-tracked futures registered over $170 million in combined long and short liquidations. Ethereum futures saw $120 million in liquidations, with smaller altcoins accounting for around $50 million.
The liquidations affected both sides of the market in an unusual way. Of the total, approximately $257 million came from long positions and $232 million from short positions.
Liquidation happens when an exchange forcefully closes a trader’s leveraged position due to insufficient funds. This occurs when a trader cannot meet the margin requirements to keep a trade open.
Some market observers on social media questioned whether Trump’s “Liberation Day” turned into a “Liquidation Day” for crypto traders.
Despite the current uncertainty, some analysts maintain a positive long-term outlook. David Hernandez, a crypto investment specialist at 21Shares, suggested that the clarity provided by the tariff announcement could benefit markets going forward.
“Markets thrive on certainty, and with speculation now largely removed, institutional investors may see an opportunity over the coming days to take advantage of compressed valuations,” Hernandez said.
Some forecasts suggest Bitcoin could reach $200,000 by the end of 2025. More ambitious projections put the price as high as $500,000 if the U.S. establishes a strategic Bitcoin reserve.
As of Thursday morning in Asia, Bitcoin traded just above $83,500 while Ethereum hovered around $1,810. Both have recovered slightly from their initial drops, with Bitcoin up 0.8% and Ethereum regaining 1.2%.
