Cryptocurrency markets experienced a sharp downturn over the past 24 hours, driven by escalating geopolitical tensions and the announcement of new U.S. tariffs on China, Canada, and Mexico.
Ethereum (ETH/USD) and XRP (XRP/USD) each fell by more than 17%, while Solana dropped 9%, following a dramatic sell-off after President Trump’s announcement of additional tariffs. Bitcoin (BTC/USD) saw a 4.1% decline at the time of writing (09:57 GMT).
This sudden drop erased all market gains from December, bringing prices back to pre-U.S. election levels.
Liquidations topped $2.2 billion, marking the largest such event this year and one of the biggest in crypto history. Ethereum led the wave of liquidations, with a combined $609.9 million in long and short positions being closed.
More than 730,000 traders were impacted by the mass sell-offs, as the market faced growing uncertainty.
The largest single liquidation order took place on Binance, where a tether-margined ETH position worth $25.6 million was closed.
Futures markets were also hit hard, with ether-linked products suffering over $600 million in losses in just 24 hours. Combined losses on XRP and DOGE futures reached $150 million, while altcoin-linked products lost $138 million. Ether-tracked futures alone lost $84 million.
The Investing.com OFFICIAL TRUMP Index token, a memecoin tied to U.S. President Trump, dropped by 12%. Additionally, World Liberty Financial (WLFI), a crypto project backed by the Trump family, saw its January investments fall by 20%.
The sell-off coincided with rising tensions over Trump’s decision to impose steep tariffs on Canada and Mexico, sparking retaliatory threats from both countries. The move has faced significant criticism from economists and global leaders, with The Wall Street Journal editorial board calling it the “Dumbest Trade War in History.”
Financial markets are preparing for economic fallout, as higher tariffs could drive up costs in sectors such as automotive and agriculture, potentially leading to broader economic instability.
