Trump’s 100% Tariff Threat Triggers $16B Crypto Sell-Off, USDe Momentarily Breaks Peg
Crypto markets plunged Friday following a warning from former U.S. President Donald Trump that he may impose 100% tariffs on Chinese imports. The announcement sparked a global risk-off reaction, wiping out over $16 billion in leveraged long positions and briefly pushing Ethena’s USDe below $1.
The rout accelerated during Asian trading hours as investors anticipated a renewed escalation in U.S.-China trade tensions. Bitcoin fell below $110,000 before bouncing back to $113,294, while Ether recovered to $3,844. The CoinDesk 20 Index slumped 12.1%, reflecting a broad-based decline across major cryptocurrencies.
Overall crypto market capitalization dropped to $3.87 trillion. CoinGlass reported $19.1 billion in liquidations, with approximately $16.7 billion coming from long positions. Ethena’s USDe dipped to $0.9996, a minor depeg highlighting volatility in derivatives markets, though the stablecoin’s minting and redemption functions remained fully operational. Ethena Labs also noted that USDe became even more overcollateralized as short-side gains were realized.
In nominal terms, Friday’s sell-off marked crypto’s largest liquidation event to date, surpassing both the 2022 FTX collapse and the early COVID-19 market crash by more than tenfold, though percentage declines were smaller relative to today’s larger market.
CoinGlass cautioned that actual liquidation figures may be higher due to reporting delays from Binance. Market uncertainty is further compounded by the U.S. government shutdown, which has stalled key economic indicators amid renewed trade war fears.
