Trump's Tariffs Trigger Global Market Panic: Crypto Plunges Over $1 Billion, Stock Market Faces Deeper Correction

Trump's Tariffs Trigger Global Market Panic: Crypto Plunges Over $1 Billion, Stock Market Faces Deeper CorrectionUS President Trump's imposition of high tariffs has sparked global fears of a trade war, causing a sharp decline in market risk appetite. Global stock markets have suffered consecutive days of heavy losses, and the cryptocurrency market has been severely impacted

Trump's Tariffs Trigger Global Market Panic: Crypto Plunges Over $1 Billion, Stock Market Faces Deeper Correction

US President Trump's imposition of high tariffs has sparked global fears of a trade war, causing a sharp decline in market risk appetite. Global stock markets have suffered consecutive days of heavy losses, and the cryptocurrency market has been severely impacted. On Monday, US stock index futures continued their plunge, Asian and Pacific markets experienced a collective sell-off, and the cryptocurrency market was hit even harder. Bitcoin fell below $75,000, down over 10%, while Ethereum, XRP, Solana, and others saw declines exceeding 18%. Total liquidations across the crypto market exceeded $1.36 billion, affecting over 440,000 accounts. This event highlights a significant risk-off sentiment and suggests a potentially sharper stock market correction.

Crypto Market Bloodbath: Over 440,000 Liquidations, Heavy Losses

Monday witnessed a massive sell-off in the cryptocurrency market. Bitcoin's price dropped below $75,000, representing a decline of over 10% within 24 hours. Other cryptocurrencies experienced even steeper falls, with Ethereum down nearly 20%, XRP and Dogecoin over 20%, and Solana over 18%. Coinglass data reveals over $1.36 billion in liquidations across the cryptocurrency market in the past 24 hours, impacting more than 440,000 users. Over $1.2 billion worth of long cryptocurrency positions were liquidated, indicating a dramatic drop in market confidence and a mass exodus of investors.

Sean McNulty, Head of APAC Derivatives at digital asset prime brokerage FalconX, suggests that sell-off pressure in cryptocurrencies may continue with the significant rise in put options. Data from derivatives exchange Deribit shows that the open interest for put options with a strike price of $70,000 is currently higher than for any other expiry date, highlighting a growing demand for downside protection. Investors' pessimistic outlook on future market trends further fueled the sell-off.

It's noteworthy that after Trump's initial tariff announcement, digital assets initially showed some resilience, seemingly decoupling from the negative impact on tech stocks. However, Monday's sell-off demonstrates the persistent high positive correlation between cryptocurrencies and the Nasdaq 100 index, meaning cryptocurrencies remain vulnerable to market volatility like other risk assets.

Trump's Double-Edged Sword: From "First Bitcoin President" to Crash Catalyst

Following Trump's election victory last November, the cryptocurrency space erupted in celebration, viewing him as a potential enthusiastic supporter and anticipating his efforts to make the US the "crypto capital of the earth." On Inauguration Day in January, Bitcoin hit a record high of nearly $110,000. Now, the individual once hailed as the "first Bitcoin president" appears to be presiding over its collapse.

Since Trump's tariff announcement last week, Bitcoin's price has plummeted by $10,000, falling from $85,000 to below $75,000, a drop of nearly 12%. This rapid decline suggests that many investors treat Bitcoin as a risk asset similar to other tech stocks, which are often the first to be sold off during market turmoil.

Haseeb Qureshi, a crypto-focused venture capitalist, tweeted last Sunday: "Crypto is weird, but it's mostly correlated with optimism and risk appetite. That optimism is crumbling under the weight of Trump's silence." Bitcoin's price is down nearly 20% since 2025. With a lack of crypto-specific catalysts, concerns about a global recession have overshadowed any regulatory tailwinds that cryptocurrencies might have benefited from this year, and Bitcoin is expected to continue tracking stock market trends.

Global Stock Market Rout: Recession Risks Soar, Threat of Economic "Nuclear Winter"

Since Wednesday of last week, Trump's tariff policy has wiped trillions of dollars off global stock markets. Market risk appetite has plummeted, with traders shifting to risk-averse strategies. Julia Zhou, COO of crypto market maker Caladan, notes that "crypto is usually a leading indicator for risk assets," anticipating a sharper correction in US stocks after today's market open.

At press time, US stock futures were down sharply, with Nasdaq futures falling over 5%, Dow futures nearly 4%, and S&P 500 futures over 4.5%. European markets also saw significant declines, with Germany's DAX30 index down over 10%, France's CAC40 and Europe's STOXX 50 down over 6%, and the UK's FTSE 100 down over 5%.

Billionaire investor Bill Ackman warned that Trump's tariffs are leading the US toward a self-inflicted "economic nuclear winter." He believes the large-scale and disproportionate tariffs are destroying confidence in the US as a trading partner. Business is a confidence game, and Trump is eroding confidence among global business leaders. This will have a profoundly negative impact on the US economy and millions of US citizens, particularly low-income consumers. He urged Trump to suspend any negotiations to resolve any "unfair" tariff agreements, otherwise the US faces a self-induced economic catastrophe.

Several investment banks have recently raised their recession risk forecasts. JPMorgan Chase increased the probability of a US and global recession to 60%. Goldman Sachs also raised its probability of a US recession in the next 12 months from 35% to 45%, citing a sharp tightening of financial conditions and increased policy uncertainty, potentially leading to a larger-than-expected decline in capital expenditures. Morgan Stanley also warned that the market has not yet priced in a coming recession. If announced tariffs persist, the downside risks to growth would increase significantly, while the upside risks to inflation would intensify. Significant deterioration in asset prices remains a significant risk to the outlook for consumer spending. While a US recession triggering a global downturn is not the base case, it is becoming an increasingly realistic downside scenario.