US President Donald Trump's decision to impose additional duties on Chinese goods at a rate of 100% triggered a massive sell-off in the crypto market.

Bitcoin, which hit an all-time high above $126,000 just a few days ago, collapsed 14% to $104,582 at one point on the evening of October 10. Ethereum collapsed 20%, dropping to $3460 at one point. On Saturday, the two largest cryptocurrencies by market value recovered their losses, but only partially: bitcoin was trading at $111,400, Ethereum at $3770.

The rapid fall was "the largest liquidation of positions in the history of cryptocurrencies", Coinglass analysts estimated. According to their estimates, in less than an hour of trading on exchanges, positions worth more than $7 billion were closed. In just 24 hours, the positions of more than 1.6 million traders were liquidated for more than $19 billion. Liquidation of traders' positions is forced when the funds in their accounts become insufficient to cover losses on an open position.

On the evening of October 10, Trump announced that from November he would impose additional duties on Chinese imports in the amount of 100% on top of the already existing rates. As a result, total duties on imports of goods from China to the United States will rise to 130%, Bloomberg writes. Trump also promised to impose export controls on "any critical software." His actions were a response to China's new restrictions on exports of rare earth metals critical to technology and other industries.

Trump's announcement of the new duties came out after U.S. stock exchanges closed, hitting the crypto market, which was still trading. But hours earlier, Trump had accused Beijing of being "increasingly hostile" on social media and hinted that he might cancel a planned meeting with Chinese leader Xi Jinping in two weeks. His threats sharply raised stock market anxiety, triggering the biggest drop in U.S. stocks since April. At the end of trading, the Dow Jones Industrial Average fell 1.9%. The S&P 500 lost 2.7% and the Nasdaq Composite collapsed by 3.6%.

This article was AI-translated and verified by a human editor

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