Tariff Threat Triggers Record $19 Billion in Crypto Liquidations
New U.S. tariffs have helped drive record liquidations in the cryptocurrency market.
As Bloomberg News reported, crypto prices plunged Friday (Oct. 10) when President Donald Trump announced an added 100% tariff on China as well as export controls on software.
It led to what data tracker Coinglass called “the largest liquidation event in crypto history,” the report added, with this wipeout coming days after the price of bitcoin hit a record $125,000.
By late Friday night, more than $19 billion had been wiped out and more than 1.6 million traders liquidated, the report said, citing Coinglass data. Upwards of $7 billion of those positions were sold in just an hour of trading on Friday.
The report noted that tensions between the U.S. and China had impacted the larger market, with oil and crypto down while investors sought refuge in gold and Treasurys.
Vincent Liu, chief investment officer at Kronos Research, told Bloomberg the downturn was “sparked by U.S.-China tariff fears but fueled by institutional over-leverage.”
“This highlights crypto’s macro ties,” he said. “Expect volatility, but watch for rebound signals in cleared markets.”
Also last week, PYMNTS looked at the continued mainstreaming of digital currency, following a report on the use of seized criminal assets to bolster government reserves.
“Parallel efforts across the private sector hint at how these reserves might ultimately be managed,” that report said, pointing to the recent news that U.S. Bank had begun custodying the stablecoin reserves backing Anchorage Digital Bank’s payments network.
On the regulatory front, the Bank of England is proposing exemptions for some firms from stablecoin-holding caps, an indication that supervisors are beginning to view token reserves as legitimate balance-sheet items “rather than regulatory anomalies,” PYMNTS added.
“The macro picture is expanding fast,” the report continued, citing estimates from JPMorgan analysts that rising stablecoin use could increase dollar demand by as much as $1.4 trillion by 2027, underlining the link between reserve policies and global liquidity.
“As crypto shifts from enforcement artifact to policy tool, the key question is whether governments can manage these digital holdings with the prudence and transparency expected of traditional reserves,” PYMNTS wrote.
As for the impact of tariffs on other sectors of the economy, recent PYMNTS Intelligence research shows that 80% of companies feel “very or extremely confident” they can adjust to supply chain disruptions caused by the levies, while 20% are “somewhat confident.”
The post Tariff Threat Triggers Record $19 Billion in Crypto Liquidations appeared first on PYMNTS.com.