Crypto Bloodbath: $10B Wiped Out in 24 Hours Amid Tariff Storm

Crypto Markets Plummet Amidst Massive Liquidations and Tariff Uncertainty

The crypto market experienced a significant downturn on February 3, 2025, with Bitcoin (BTC) plummeting by over $10,000 and wiping out approximately $2.2 billion in market value. This sudden crash was accompanied by a wave of liquidations, with over $2 billion in positions being closed within a 24-hour period.

Binance CEO Richard Teng addressed the market volatility in a series of tweets, urging users to stay calm and focus on skill-building during the downturn. He noted that while the current market conditions may be challenging, they are not unprecedented, and investors have weathered similar storms in the past. Teng also emphasized that as the crypto market matures, volatility will become less of a concern.

Ethereum (ETH), the second-largest cryptocurrency by market capitalization, was particularly hard hit, with prices falling by 18% overnight. The sudden crash resulted in over $2.3 billion in total crypto liquidations across 738,000 traders in 24 hours. Ethereum bore the brunt of the liquidations, with over $611 million in combined long and short positions being closed.

Bybit CEO Ben Zhou estimated that the actual total liquidation figure was significantly higher than the reported $2 billion, potentially reaching as much as $8-10 billion. Zhou attributed this discrepancy to API limitations on data ingestion, which may have led to underreporting of liquidations on various exchanges.

The crypto market crash comes amidst broader concerns about Trump's trade policies, including new 25% tariffs on Canada and Mexico, and 10% tariffs on China. These measures could potentially inject inflation into the global economy, complicating central banks' efforts to lower interest rates. Market experts believe that these tariffs, combined with the ongoing uncertainty surrounding the DeepSeek saga, contributed to the sudden sell-off in crypto markets.

The impact of the tariffs extended beyond the crypto market, with Dow futures dropping more than 650 points early Monday as European stocks followed suit alongside dollar gains. Despite the widespread sell-off, some analysts remain optimistic about the long-term prospects of the crypto market, noting that historical data suggests that extreme levels of fear often present buying opportunities.