Executive Summary
- Cryptocurrency markets experienced a significant downturn on Friday, with over $1 billion in liquidations and major assets like Bitcoin, Ethereum, and Solana erasing recent gains.
- The market plunge directly coincided with President Trump’s announcement of “massive” tariffs against China, sparking fears of a renewed trade war.
- WLFI, a crypto token associated with the Trump family, plummeted over 17% immediately following President Trump’s China announcement.
The Story So Far
- The significant downturn in cryptocurrency markets, which saw Bitcoin, Ethereum, and Solana erase recent gains, was primarily triggered by President Trump’s announcement of “massive” tariffs against China, sparking fears of a renewed trade war and interrupting the historically strong “Uptober” trend for crypto assets.
Why This Matters
- President Trump’s announcement of “massive” tariffs against China immediately triggered a significant downturn across cryptocurrency markets, leading to over $1 billion in liquidations and reversing recent gains for major assets like Bitcoin, Ethereum, and Solana, thereby interrupting the historically positive “Uptober” trend. This event underscores the crypto market’s heightened sensitivity to global geopolitical and economic shifts, demonstrating how political decisions can rapidly alter market sentiment and investor confidence in digital assets, moving in tandem with traditional stock markets and even directly impacting Trump-linked tokens.
Who Thinks What?
- President Trump announced “massive” tariffs against China, canceling a meeting with President Xi Jinping and acknowledging that the move could be “potentially painful” for Americans, which coincided with a significant cryptocurrency market downturn.
- Cryptocurrency markets and investors experienced a substantial downturn, with over $1 billion in liquidations and major assets like Bitcoin, Ethereum, and Solana erasing recent gains, directly following President Trump’s tariff announcement, interrupting the historical “Uptober” trend.
- British financial services firm Hargreaves Lansdown warned against including Bitcoin in investment portfolios due to its high risk, advising that crypto should not be relied upon to meet financial goals, despite allowing qualified clients to invest in a new British crypto exchange.
Cryptocurrency markets experienced a significant downturn on Friday, with over $1 billion in liquidations occurring within 24 hours. The sudden plunge, which saw Bitcoin, Ethereum, and Solana erase recent gains, coincided with President Trump’s announcement of “massive” tariffs against China, sparking fears of a renewed trade war.
Bitcoin’s price fell from over $122,000 to approximately $116,200, representing a 4% decline. Ethereum dropped nearly 8% to about $3,975, while Solana dipped over 7% to $205. These movements pushed Bitcoin back to its October 1 price level, and Ethereum and Solana to new October lows, according to data from CoinGecko.
Market Reaction to Trade War Concerns
The crypto market’s sharp decline directly followed President Trump’s declaration on Friday morning. He announced the cancellation of a planned meeting with Chinese President Xi Jinping and ordered a “massive increase” in tariffs on Chinese goods. Trump himself acknowledged that this move could be “potentially painful” for Americans.
The stock market also reacted negatively to the news. The Nasdaq saw a 3.5% drop, the S&P 500 fell 2.7%, and the Dow was down 1.9%.
Impact on Trump-Linked Crypto Token
Notably, WLFI, the native token of World Liberty Financial—a crypto platform associated with the Trump family—was significantly impacted. The token plummeted over 17% immediately after President Trump’s China announcement, falling to just above $0.14 before a partial recovery to $0.16.
Historical “Uptober” Trend Interrupted
October has historically been dubbed “Uptober” by many investors due to its strong performance for Bitcoin. This year initially seemed to follow the trend, with Bitcoin surging approximately 10.5% in the first week to an all-time high of over $126,000. However, the recent tariff news interrupted this pattern, leading to a rapid reversal of those gains.
Polymarket Token and Insider Trading Allegations
In related news, Polymarket, a prediction market platform, is reportedly planning to launch its own native crypto token, likely next year. This development follows a $2 billion investment in Polymarket from Intercontinental Exchange, valuing the company at $9 billion. The company is also preparing for reentry into the U.S. market after a 2022 ban by the CFTC.
Separately, organizers of the Nobel Peace Prize are investigating potential insider trading on Polymarket. Reports indicate that odds for this year’s winner, Venezuelan resistance leader Maria Corina Machado, surged from near-zero to over 70% on Polymarket roughly 11 hours before the award announcement, with the market accumulating over $21.4 million in trades.
BlackRock’s Bitcoin ETF Success and UK Investment Firm’s Warning
BlackRock’s iShares Bitcoin Trust has become the asset manager’s most profitable ETF by annualized fee revenue, holding $97 billion in assets under management. Meanwhile, British financial services firm Hargreaves Lansdown issued a warning, advising against including Bitcoin in investment portfolios due to its high risk. The firm, which manages £170 billion ($226.8 billion) in assets, stated that crypto should not be relied upon to meet financial goals, though it would allow qualified clients to invest in a new British crypto exchange.
