Trade Tensions Spark $1B Crypto Sell-Off, Bitcoin Plunges 10%

Crypto traders suffered significant losses as escalating trade tensions between the US and key partners overshadowed President Donald Trump's recent announcement of a crypto strategic reserve. According to Coinglass data, traders speculating on the crypto market saw losses amounting to $975.65 million during the past day.

The crypto market reacted sharply to the news of escalating trade tensions, with Bitcoin plunging 10% to $83,577, according to CryptoSlate data. The altcoins tied to Trump's crypto reserve initiative—including Ethereum, Cardano’s ADA, XRP, and Solana’s SOL—saw double-digit losses, with some dropping as much as 17%.

Vincent Liu, the CIO of crypto investment firm Kronos Research, told CryptoSlate that the tariff escalations had shaken investor confidence and sparked a steep crypto sell-off. According to Liu, Bitcoin's retreat to $83,000 and deeper losses in altcoins underlined the market's growing sensitivity to macroeconomic shifts.

Analysts at The Kobeissi Letter noted that the market wiped out $500 billion in value over the past 24 hours, leaving the total crypto market cap $100 billion lower than before the crypto reserve announcement on March 2. The firm attributed the decline to the global shift toward risk-off assets as trade war concerns fueled broader economic uncertainty. It added:

"The reality is that crypto is now viewed as a risky asset. Take a look at the sharp divergence between Gold and Bitcoin in their YTD performance. While gold prices are up +10%, Bitcoin is down -10% since January 1st. Crypto is no longer viewed as a safe haven play."