USDCrypto Bulls Lose $500 Million After Trump’s Tariff Threats
Trump’s tariff threats have resulted in a huge loss for crypto bulls, who lost more than $500 million in a span of 24 hours. The President’s threats regarding European imports and Apple products have brought on a wave of liquidations, with Bitcoin’s price plummeting to around $108,600.
Just a day prior, BTC was traded for more than $111,000, and this quick shift in prices shook more than just Bitcoin traded – it affected the broader crypto market. Therefore, all those owning ETC, Solana’s SOL, and Dogecoin showed losses that ranged from $30 million to over $100 million.
It’s questionable whether Trump’s tariff threats should have an impact on whether or not people continue to trade cryptocurrency and invest in digital wallets. Those who decide to move forward with crypto trading should be careful when choosing digital wallets, which are a necessity for everyone interested in managing tokens securely within one app (source: https://bestwallet.com/kr/ethereum-wallet/).
If the decision falls on moving forward with crypto trading, familiarization with the current crypto trading ecosystem is essential. This largely entails learning about Donald Trump’s policy regarding cryptocurrency.
Donald Trump’s Tariff Threats
The US President Donald Trump has made threats to impose 50% tariffs on EU goods, thus risking a war with the European Union. As expected, the threat shook up global markets, reflecting on the crypto universe, as well. While there were talks of these steep tariffs coming into play as soon as June 1, Trump agreed to extend the deadline until July 9. This comes after his pleasant call with Ursula von der Leyen, who said the EU needed more time to agree on the tariffs.
As a reminder, Trump made tariff threats in early April, giving the Union 90 days to agree. However, last Friday changed that, as the President said he isn’t interested in a deal. Still, he said it’s his privilege to grant the extension to the Union, thus avoiding a transatlantic trade war – or, at least, putting it off for a latter date.
Futures And Liquidations
Bitcoin and Ethereum futures are contracts made for buying or selling cryptocurrency, and they provide traders with an opportunity to speculate on price fluctuations. The advantage is that, with BTC and ETH futures, people don’t have to own the cryptocurrency in question or possess a digital wallet.
Now, both Bitcoin and Ethereum futures saw significant losses. The former accounted for nearly $181 million in losses, while the latter stood at almost $142 million. And while these two had the most noteworthy losses, other altcoins also added to the grim situation. Together, they contributed another $100 million in liquidations, with the list including SOL, DOGE, and XRP.
Speaking of liquidations, they happen when the exchange closes a trader’s favorable position abruptly and forcefully. This shift usually happens due to the Bitcoin trader not being able to meet the margin requirements.
With an event as significant as Trump’s incredible tariff threats, it’s to be expected that the market will go through large-scale liquidations, which usually indicate market extremes. From panic selling to panic buying, liquidations are expected to produce an overreaction in people, changing the way the market functions.
Another thing that might be typical for these situations is an imminent cascade of interventions. When this happens, it usually means the crypto market is going through a turning point, with a significant price reversal hanging in the balance.
Speaking of liquidations, Trump’s tariff threats produced some major ones. Therefore, the single largest liquidation for this period happened on OKX, with a $9.53 million BTC-USDT swap.
Trump’s Threats Destabilized The Market
For a while, Bitcoin was experiencing what some might call a calm period, as calm as the volatile crypto market can be. The majority of crypto traders were hoping for a calm weekend, as BTC gained momentum on ETF inflow, raising institutional interest beyond all proportions.
Their hopes were quickly shattered once Bitcoin’s volatility returned with a vengeance. Generally speaking, Bitcoin is known as a volatile investment, as its price can change overnight, and it has done so many times in the past. Interestingly enough, BTC is less volatile than some mega-cap stocks, like 33 S&P 500 stocks.
Bitcoin’s environment is now destabilized, a situation which is brought on by renewed trade war fears. Therefore, it’s expected that smart and cautious traders will head into the weekend and the next week with more caution than before. Next week’s sessions might bring surprises that might be unpleasant for some traders not familiar with the situation.
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