Ethereum News Today: Trump's Tariffs, Centralized Control Spur $7.5B Crypto Collapse

Cryptocurrencies tied to former U.S. President Donald Trump have plunged, with the World Liberty Financial (WLFI) token dropping over 30% since mid-September amid a broader market selloff linked to escalating U.S.-China trade tensions. WLFI, which peaked at $0.3200 in September, now trades at $0.1827, while Trump Coin has fallen from $50 to $7, erasing $7.5 billion in combined market capitalization. The decline reflects investor concerns over centralized control, inflationary tokenomics, and a broader crypto market crisis triggered by Trump's 100% tariff announcement on Chinese imports.

WLFI's collapse has been exacerbated by on-chain activity. Whale investors have dumped holdings, with exchange supply rising to 129 million TRUMP tokens and 20.24 million WLFI tokens in their possession. The project's tokenomics-199 million TRUMP and 24.6 billion WLFI tokens in circulation-have drawn criticism for their inflationary nature, with $5 million worth of TRUMP and millions of WLFI tokens entering markets daily. Despite burning 47 million WLFI tokens to stabilize the price, the move has failed to restore confidence, as technical analysis suggests further declines to $0.15 or $0.10.

The broader crypto market has mirrored WLFI's turmoil. Bitcoin fell 12% to $107,000, Ethereum dropped 16% to $3,700, and altcoins like Solana and XRP plummeted 15–20% following Trump's tariff announcement. Coinglass data revealed $19 billion in liquidations within 24 hours, marking the largest single-day wipeout in crypto history. Analysts attribute the sell-off to risk-off sentiment as investors flee volatile assets for stablecoins and gold.

Industry experts have raised doubts about celebrity-backed tokens like WLFI. Kevin Rusher, founder of RAAC, called the project symptomatic of crypto's "market immaturity," emphasizing that institutional adoption-not speculative hype-will define long-term success. Mangirdas Ptašinskas of Galxe added that WLFI's launch spiked Ethereum gas fees, highlighting infrastructure challenges ahead of mainstream adoption.

World Liberty Financial's governance has also drawn scrutiny. The project blacklisted 272 wallets, including one owned by Tron founder Justin Sun, to combat suspected price manipulation. While the team argues such measures protect user funds, critics accuse it of centralized control, undermining decentralization principles.

Looking ahead, WLFI's prospects hinge on its ability to rebuild trust and demonstrate sustainable tokenomics. A proposed buyback-and-burn program using protocol-owned liquidity fees has received community approval but awaits formal voting. However, analysts caution that Trump's waning political influence and potential Republican losses in 2026 could further pressure the tokens.

[1] Here's Why Trump Coin and WLFI Token Prices are ... (https://www.banklesstimes.com/articles/2025/10/08/heres-why-trump-coin-and-wlfi-token-prices-are-crashing/)

[2] World Liberty Financial's WLFI Token Plunges Amid ... (https://www.fxleaders.com/news/2025/09/08/world-liberty-financials-wlfi-token-plunges-amid-manipulation-allegations-and-volatility/)

[3] World Liberty Burns 47M Tokens as WLFI Price Slides (https://cointelegraph.com/news/wlfi-token-burn-price-drop-world-liberty-financial)

[6] Crypto Crash: Bitcoin and Ethereum Plunge After Donald Trump ... (https://www.ibtimes.com/crypto-crash-bitcoin-ethereum-plunge-after-donald-trump-slaps-full-tariffs-china-imports-3786579)

[13] Trump tariffs upend crypto market, trigger record liquidations (https://www.cnbctv18.com/market/cryptocurrency/trump-tariffs-upend-crypto-market-trigger-record-liquidations-19712071.htm)