Trade Tensions Spark Global Market Rout, Bitcoin Plunges Below $100,000

Global markets, including the Nasdaq, S&P, and Dow, tumbled on Monday as escalating trade tensions between the United States and its major trading partners sparked concerns about a potential global economic slowdown. The U.S. President Donald Trump's decision to impose tariffs on imports from Canada, Mexico, and China, as well as the threat of additional tariffs on the European Union, sent shockwaves through financial markets worldwide.

The Nasdaq Composite Index fell by 2.5%, while the S&P 500 Index and the Dow Jones Industrial Average both declined by around 2%. The sell-off was driven by fears that the new tariffs would disrupt global supply chains and hinder economic growth. Investors also worried that the escalating trade tensions could lead to a full-blown trade war, further damaging the global economy.

The cryptocurrency market was not immune to the broader market sell-off. Bitcoin (BTC), the world's largest cryptocurrency, slumped below the $100,000 mark, while other major cryptocurrencies, such as XRP and Ethereum (ETH), also experienced significant losses. The total market liquidation was estimated to be around $8-10 billion, according to Bybit CEO Ben Zhou.

Zhou warned that the actual liquidation figures could be significantly higher than reported, as major exchanges, including Bybit, face data limitations. He noted that during the 2022 FTX collapse, recorded liquidations were 4-6 times worse than publicized. Zhou's remarks raised concerns among investors and analysts about the potential impact of the new tariffs on the cryptocurrency market.

Despite the market turmoil, some analysts remained optimistic about the long-term prospects of the cryptocurrency market. Jeff Park, head of alpha strategies at Bitwise Invest, predicted that as the financial war unravels, the price of Bitcoin would go "violently higher." He argued that Trump's tariffs were ultimately intended to seek a multi-lateral agreement to weaken the dollar, essentially a Plaza Accord 2.0.

However, other market observers were more cautious. Economist and trader Alex Krüger posted on X (formerly Twitter) that Bitcoin is mainly a risk asset, and aggressive tariffs are very negative for risk assets. He suggested that while short-term pain is inevitable, long-term recovery remains possible.

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