Cryptocurrency markets suffered a historic downturn on Friday as U.S. President Donald Trump escalated trade tensions with China, sending shockwaves through both equities and digital assets. Bitcoin, which had been trading above $121,000 in the morning, fell sharply below $106,000 by afternoon, while Ethereum plunged from $4,300 to under $3,600, marking a multi-month low. Altcoins such as Dogecoin and Cardano briefly suffered daily losses of up to 40%, and several smaller tokens within the top 100 by market capitalization, including Story (IP) and Worldcoin (WORLD), were down more than 50% within an hour.

This cascade of sell-offs triggered a record $19 billion in crypto liquidations over 24 hours, according to CoinGlass, with the majority of losses stemming from long positions. Experts note that this event dwarfs past “black swan” market shocks, including the $1.2 billion wiped out during the 2020 Covid-19 market crash and the $1.6 billion lost following FTX’s collapse in 2022. The sheer scale of Friday’s liquidation underscores both the rapid growth in crypto market participation and the heightened risk appetite that emerged as Bitcoin and other leading assets reached new all-time highs.

The immediate trigger was Trump’s threat of “massive” new tariffs on China, first announced in the morning and reinforced through a subsequent post on Truth Social. Investor sentiment quickly shifted, and automated trading systems likely amplified the sell-off, creating one of the most severe single-day liquidations in crypto history. CoinGlass reported that more than 1.6 million traders were affected, although actual figures may be higher due to reporting limitations from major exchanges like Binance.

Since Friday’s lows, top assets have managed a partial rebound but remain significantly off recent highs. Bitcoin trades slightly above $112,000, representing an 8% daily loss, while Ethereum remains down 12% at $3,816. XRP fell 13% to $2.45, and among the top 10 assets, Dogecoin experienced the largest decline, down 24% to $0.19. Solana also faced heavy losses, falling 18% to $183. Analysts caution that this volatility is likely to persist over the weekend, with projections suggesting a high probability of continued red candles for Bitcoin and other major cryptocurrencies.

For investors and market observers, Friday’s events highlight the sensitivity of crypto markets to macroeconomic and geopolitical developments. The scale of liquidations reflects both the potential for rapid wealth erosion in leveraged positions and the growing maturity of market infrastructure capable of processing these extreme events. While some traders may view the dip as a buying opportunity, caution is warranted as global trade policies continue to influence investor behavior. The broader takeaway is clear: the crypto ecosystem is increasingly intertwined with international markets, and volatility may remain a defining feature in the near term.