Trump's Tariffs Spark Crypto Bloodbath: $2B in Liquidations, Bitcoin Plummets

Cryptocurrency markets experienced a historic crash following President Trump's imposition of tariffs on imports from Canada, Mexico, and China, with over $2 billion in liquidations. Bitcoin, the world's largest cryptocurrency, plummeted to a local bottom of $92,585, marking a significant decline from recent highs.

Analysts attributed the crash to investor concerns over the potential global trade war, prompting a shift from riskier assets like cryptocurrencies. Major altcoins such as Dogecoin, XRP, and Cardano also suffered steep declines, with the overall crypto market cap dropping by 12%. Futures markets were hit hard, with over $2.2 billion in liquidations in just 24 hours.

Bitcoin's price may face further downward pressure, with on-chain data suggesting a 22% probability of a drop to $75,000 by March. Analysts fear that rising inflation from the tariff dispute could limit central banks' ability to ease monetary policy. However, some experts remain optimistic, predicting potential price recovery if crypto ETFs gain regulatory approval.

The 25% tariffs have rattled industries from agriculture to automotive, as Canada and Mexico threaten retaliation. Analysts believe that if economic pressures persist, the U.S. Federal Reserve may be forced to reignite quantitative easing (QE) to stabilize markets.

Despite the current turmoil, some experts maintain a positive outlook for Bitcoin and digital assets. Arthur Hayes, former CEO of BitMEX, expects Bitcoin to rebound after an initial fall to $75,000, paving the way for a future bull run. According to Derive.xyz, active filings for crypto spot ETFs by firms like Grayscale and Bitwise could signal further legitimacy and attract institutional capital.