Trump's Tariffs Spark $2B Crypto Bloodbath; Bitcoin Plunges Below $100K

The cryptocurrency market experienced a significant downturn in the past 24 hours, with a total of $2.028 billion in liquidations across the network. This surge in liquidations resulted in over 700,000 people being liquidated, marking a substantial impact on the market.

The market turmoil was triggered by President Trump's announcement of new tariffs on imports from Canada, Mexico, and China. These tariffs, set to take effect on Tuesday, have sparked concerns about inflation and its potential impact on consumer costs. Economists have warned that these measures could worsen inflation and lead to job losses and supply chain disruptions.

The crypto market's reaction to these tariffs was swift and volatile. Bitcoin, the world's largest cryptocurrency, fell below $100,000 on Saturday and continued its decline to $92,000. Ethereum, the second-largest cryptocurrency, dropped by 24% to $2,300. The market turbulence led to $1.7 billion in long position liquidations over 24 hours, with Ethereum traders experiencing $528 million in losses and Bitcoin traders facing $421 million in liquidations.

Analysts have suggested that Trump's new tariffs could lead to increased demand for Bitcoin as a hedge against inflation. However, they caution that ongoing market volatility may continue to pressure prices downward in the short term. The implementation of new tariffs could weaken the dollar and create conditions favorable for Bitcoin's growth, as the US grapples with the Triffin Dilemma. This comes as the US maintains its role as the global reserve currency, requiring it to maintain trade deficits to provide worldwide liquidity.

The tariffs are viewed as a strategic move to temporarily weaken the dollar, potentially leading to a multilateral agreement similar to "Plaza Accord 2.0" that could reduce dollar dominance and encourage countries to diversify their reserves beyond US Treasuries. As tariffs push inflation higher, affecting both domestic consumers and international trade partners, foreign nations may face currency debasement, potentially driving their citizens toward Bitcoin as an alternative store of value. Both sides of the trade imbalance will seek refuge in Bitcoin, driving its price "violently higher," according to analysts.