Crypto Markets Wipe Out $1 Trillion in One Day

The cryptocurrency market has taken a major hit after US President Donald Trump announced an additional 100 percent tariff on China. According to a Bloomberg report, more than 1.6 million traders have lost more than $19 billion in the cryptocurrency market so far.

The Economic Times reported that the market has taken a major hit in less than 24 hours after Trump's announcement. The newspaper reported that the market value of more than $1 trillion in cryptocurrencies has fallen at a rapid pace in less than 24 hours; which is now a record.

Citing 24-hour data from Coinglass, the report said that more than $19 billion in the 'largest liquidation event in crypto history' has disappeared; which affected more than 1.6 million traders. More than $7 billion in positions were sold in less than an hour of trading on October 10.

Bitcoin fell 8.05% to $111,542.91 as of 12:42 p.m. on October 11, according to CoinMarketCap data, with a market capitalization of $2.22 trillion and trading volume of $183.88 billion. Ethereum was trading at around $3,878 after falling 11%. Major altcoins such as AXP, Dogecoin, and Cardano fell by up to 30% in what traders described as a form of leveraged liquidation.

According to CoinGlass, more than $20 billion in leveraged positions were liquidated in just 24 hours, making it the largest single-day liquidation event in crypto trading history. About 1.6 million traders had their positions forcibly closed, most of them long positions in Bitcoin and Ethereum.

According to the Business Am website, the crypto market’s equivalent of the Brand Strength Index fell by about 40 percent overnight. This is an indication of the rapid removal of speculative leverage from the system.

“It was a liquidity-driven reset rather than a failure. The sell-off was mechanical. It had little to do with blockchain fundamentals and nothing to do with macro panic,” said Daniel Parreira, senior vice president at Afri.

“This was not irrational behavior. Bitcoin is now behaving like a high-beta macro asset. It is reacting to global trade policy, inflation data and central bank signals. This is a sign of the end of cryptocurrencies, not their inadequacy.”

The British daily Independent reported that the decision to impose new tariffs on Canada, Mexico and China has raised fears of a trade war around the world. This has resulted in adverse reactions not only in the stock market, but also in the cryptocurrency market as investors' interest in risky assets has decreased.