Donald Trump’s recent tax on Chinese imports has caused what is being called the largest single-day drop in history in the global cryptocurrency market.
According to Coinglass, the tariff announcement has resulted in liquidations for almost 1.5 million crypto traders in the last 24 hours.
White House response sparks global cryptocurrency crash
China’s Ministry of Commerce said on Thursday, October 9, that foreign exporters must get an export license for commodities that include more than 0.1% rare earth minerals from China or are created using rare earth mineral extraction or refining techniques. According to Chinese officials, this was done to “safeguard national security and interests.”
The White House responded to the Chinese capital of Beijing’s new export restrictions on the minerals by announcing a 100% tax on all Chinese imports, which would go into effect on November 1st or earlier. Trump said that this action was a “extremely hostile letter to the world” and that almost all of their products will be impacted by the export restrictions.
New tariff by November 1st, unless China reconsiders
Wrote Donald Trump. Based on China’s unprecedented position, and speaking only for the United States of America and not other nations that have been similarly threatened, the United States of America will impose a 100% tariff on China beginning November 1st, 2025 (or sooner, depending on any further actions or changes taken by China), in addition to any tariffs that they are currently paying.
It is unfathomable to think that China would have done such a thing, but they did, and the rest is history. Thank you for paying attention to this topic!” Continued Trump.
Significant decline in the stock market and cryptocurrency
The announcement of the additional taxes therefore caused the cryptocurrency market to plummet on Saturday, October 11, the worst single-day wipeout in cryptocurrency history: around $19.2 billion (€16.5 billion) in leveraged positions were liquidated, according to Coinglass.
Amid escalating concerns of a trade war between the United States and China, two prominent cryptocurrencies, Ethereum and Bitcoin, both saw record-breaking liquidations and suffered the worst losses. Investors in cryptocurrencies are rushing to shift their funds to safer and more reliable assets. The value of Bitcoin, the largest digital currency in the world, fell by 8–12%. Ethereum saw a decline of around 11%.
According to reports, other cryptocurrencies like as XRP, DOGEcoin, and Ada had declines of 19%, 27%, and 25%, respectively.
Wall Street stocks had a similar plunge. By 4:00 p.m. on Friday, October 10, the Dow Jones Industrial Average had down 878 points, the S&P 500 had dropped 2.71 percent, and the NASDAQ Composite had dropped 3.58 percent. These are the biggest one-day losses since this year’s April.
Due to tariff issues, recently cordial ties are once again under jeopardy
The White House is surprised by the action because Trump has called Washington’s relationship with China “very good” in recent months. Trump also asserts that “now there seems to be no reason to do so,” unless China reexamines the limitations by November 1. Trump had been slated to meet with Chinese President Xi Jinping in two weeks at the Asia-Pacific Economic Cooperation meeting, which will take place in South Korea.
Although the liquidations would remain final, the cryptocurrency market prices could be able to rebound if China reverses the decision before November 1.
