$1.2 Billion in Crypto Liquidations as Canada, Mexico Threaten Retaliation for Trump Tariffs’

A crash in the crypto market which started with the beginning of the month seems to deepen as major assets continue to sell-off. Bitcoin dropped 7% to US$93,583 (AU$153,428), while others took even greater losses.

Ethereum (ETH) is down over 21%, while XRP dropped almost 28%, even Dogecoin (DOGE) is down 26% on the daily timeframe.

Related: Hedge Fund Warns: Trump Administration’s Crypto Enthusiasm May Lead to Market Havoc

Much of this comes as Donald Trump followed through with threats to impose tariffs on Canada, China and Mexico. The announcement caused a crash in equity markets and a surge in the price for oil as well as the US Dollar price.

China Could Retaliate Next, EU Also a Target for Trump

It didn’t take long for Mexico and Canada to announce they would retaliate, with the latter releasing a list of its own with a number of products that will be slapped with a 25% tariff starting Tuesday.  

A report by Bloomberg also suggests that China is contemplating actions against Trump’s tariffs. Further, the European Union won’t be spared, with Trump saying he will “definitely” go ahead with a tariff on the EU bloc.

I wouldn’t say there’s a timeline, but it’s going to be pretty soon.

Donald Trump, US President

European officials have also signalled they would be responding with decisive actions against the United States.

The flight to safe-haven assets and away from risk-on assets like stocks and crypto has wiped out almost half a million crypto traders. As per coinglass, 459,858 traders were liquidated with a total liquidation sum of US$1.22 billion (AU$1.98 billion).

Ethereum (ETH) was the most heavy-hit asset with US$258.85 million (AU$422 million) in total liquidations, of which US$221.15 million (AU$360.5 million) are long positions. Bitcoin suffered US$254.07 million (AU$414.17 million) in forced sales with US$218.48 million (AU$356.15 million) long positions closed.

Did Tariffs Come As a Surprise to Markets?

Analysts at 10X Research wrote in a note to investors that the market should have already priced in the tariffs, but that traders were likely preoccupied with other market events.

While these tariffs were widely known, the market had been primarily fixated on the DeepSeek saga, seemingly underestimating the geopolitical response and push back from foreign leaders threatening retaliation of those tariffs.

10X Research

And it’s precisely this push-back that is still unfolding right in front of us as China and the EU are far bigger markets than Canada and Mexico.

Related: NYSE And Grayscale File for Conversion of XRP Trust With $16 Million AUM to ETF

So, while most analysts still remain bullish on the longer-term outlook for Bitcoin, the current market volatility could continue for a little longer.