Trump’s 100% China Tariff Sparks $20B Market Meltdown - 1.6M Crypto Positions Wiped Out

Trade War Escalation Triggers Crypto Carnage

The hammer dropped hard on digital assets as former President Trump's proposed 100% tariff on Chinese goods sent shockwaves through global markets. What started as political posturing turned into a $20 billion bloodbath across cryptocurrency portfolios.

Liquidation Tsunami Hits Traders

Over 1.6 million crypto traders watched their positions evaporate in the ensuing market panic. Leveraged longs got crushed first, followed by cascading liquidations that turned minor corrections into full-blown capitulation events. The domino effect exposed just how interconnected traditional finance and crypto markets have become.

Market Structure Shows Cracks

When geopolitical tensions flare up, crypto's 'uncorrelated asset' narrative takes another hit. Sure, the technology's revolutionary—but when Wall Street sneezes, digital assets still catch the cold. Another reminder that in finance, the only free lunch is the one you bring yourself.

Bitcoin, Ethereum Lead $16.8B Long Losses

Long positions accounted for the bulk of the damage, totaling $16.83 billion, while $2.49 billion came from shorts.

Bitcoin and ethereum led liquidations at $5.38 billion and $4.43 billion, respectively, followed by Solana ($2.01B) and XRP ($708M).

Hyperliquid saw the largest single liquidation, an ETH-USDT position worth $203.36 million, as total exchange liquidations topped $10.3 billion.

Analysts noted that the wipeout marked one of the most severe deleveraging events of the year, highlighting the extreme volatility still present across crypto markets.

This is likely the largest liquidation event, in $ terms, in crypto history. pic.twitter.com/NcpTnSISOr

Notably, the global crypto market cap fell over 9% in 24 hours, sliding to $3.8 trillion as prices tumbled across major assets.

Bitcoin dropped from above $122,000 on Friday morning to around $113,600, wiping out all gains since August, and briefly dipped below $102,000 later that evening.

The sell-off accelerated after Donald Trump threatened a “massive increase in tariffs” on Chinese imports, responding to Beijing’s new export restrictions on products containing over 0.1% rare earth elements.

Trump later confirmed plans for 100% tariffs, though hinted he could reverse them if China changes course before Nov. 1.

Analysts say a tariff reversal could trigger a short-term recovery in crypto markets, though liquidation losses remain locked in.

Still, one major Hyperliquid whale reportedly shorted nine figures worth of BTC and ETH, earning an estimated $190 million profit, according to on-chain analyst @mlmabc, who suggested the trader may have influenced Friday’s crash.

In case you didn’t know – the BTC whale closed 90% of his BTC short and fully closed his ETH short, making around $190–$200M profit in just one day on Hyperliquid.

The crazy part is that he shorted another 9 figs worth of BTC and ETH minutes before the cascade happened. And this… pic.twitter.com/QhmUpesG0j

Trump’s Approval Hits New Lows amid Government Shutdown

US President Donald Trump’s approval rating has fallen sharply, with just 40% of Americans approving and 58% disapproving, according to a new Reuters/Ipsos poll.

The drop follows growing criticism of his decision to militarize law enforcement. A separate HarrisX survey showed a slightly higher 46% approval, underscoring the DEEP partisan divide across the country.

The decline comes amid an ongoing government shutdown triggered by Congress’s failure to pass spending bills by the October 1 deadline.

Trump blamed Democrats, saying he WOULD target their programs in future budget cuts. Meanwhile, on the Polymarket prediction platform, 86% of traders expect the shutdown to continue past October 15, reflecting waning confidence in Washington’s ability to compromise.

Trump’s pro-crypto stance, a central theme of his 2024 campaign, is also drawing scrutiny.

Senator Elizabeth Warren has warned that Trump’s crypto involvement could pose ethical risks if he profits from related ventures while in office.