Ether took a massive hit on Monday as the cryptocurrency market saw a widespread downturn. The second-largest digital asset by market capitalization tumbled 26.53% in Asia, falling to $2,135.
This was Ether’s most significant drop in nearly four years, surpassing its May 2021 crash. Bitcoin also slumped 8% to $92,000, dragging other major tokens down. Solana lost 13% to trade at $184, while XRP plunged 28% to $1.82, far from its $3 high recorded just a month ago.
Market chaos and liquidations
The sharp decline in the crypto market led to massive liquidations. Data from Coinglass revealed that within just 12 hours, $1.3 billion in long positions were wiped out. Ether traders suffered the most, losing $400 million, while Bitcoin holders saw $300 million in long positions disappear. The CoinDesk 20 index, which tracks the top 20 cryptocurrencies, dropped nearly 21%, reflecting the broader market sell-off.
Source: Coinglass
Meme coins were not spared. The Trump-themed cryptocurrency, which had gained traction following his election victory, fell 12%. Dogecoin, backed by Elon Musk, dropped 14%, pushing it 45% below its peak in December. Other major altcoins, including Cardano, Avalanche, and Chainlink, saw double-digit losses of over 10%.
Trump’s tariff announcement sparks panic
The market sell-off was triggered by former President Donald Trump’s announcement over the weekend that the US would impose 25% tariffs on imports from Canada and Mexico. Investors viewed the move as a sign of growing economic uncertainty, leading to a sharp reaction in both traditional and crypto markets.
The Wall Street Journal criticized the decision, calling it “the Dumbest Trade War in History.” Trump responded on Truth Social, claiming that entities controlled by China drove opposition to tariffs. He defended the policy, arguing that tariffs should have never been replaced by the income tax system in 1913. He insisted that the reaction to the tariffs had been overwhelmingly positive.
Trump-linked Crypto investments take a hit
Despite Trump’s confidence in the policy, crypto assets tied to him have suffered heavy losses. Data from Spot on Chain showed that the Trump family’s crypto project, World Liberty, saw a $51.7 million decline in value, representing a 21% loss from its $242.77 million investment. Ether alone accounted for a $36.7 million drop, losing 24.4%, while Wrapped Bitcoin fell by 12.1%, wiping out $8 million. The ENA token saw the steepest decline, dropping 43.7% and losing $2.05 million.
The number of liquidations occurred due to lending activities across the DeFi sector. DeFi chain experienced a 24-hour liquidation of $310 million during this period which set a new record since August last year. The total value of liquidated Ether collateral reached $181 million during the recent period with Wrapped Bitcoin positions amounting to $49.2 million. The crypto market decline stems from increased investor concerns about economic policies as market uncertainty sparks mass asset sales.