Coinglass stated in its post on X that since exchanges don’t always publish these orders in real time, the total might be significantly higher. The post claims that the biggest cryptocurrency exchange in the world, Binance Holdings, only publishes one liquidation order every second. Even though market weakness was evident before Friday, Trump’s comments caused bitcoin to drop more than 12%. The biggest cryptocurrency was trading below $113,000 on Friday night in New York, after hitting an all-time high of over $125,000 earlier this week.
Following Trump’s announcement that he will levy an additional 100 percent tax on China and apply export curbs on software, cryptocurrency prices plummeted on Friday. What data tracker Coinglass referred to as “the largest liquidation event in crypto history” made this slump even worse. Brian Strugats, chief trader at Multicoin Capital, stated, “The focus now shifts to counterparty exposure and whether this triggers broader market contagion.” According to some estimates, the overall liquidations have exceeded US$30 billion, he added. Significant market turbulence resulted from the US and China’s intensifying rhetoric, which hurt stocks, oil, and cryptocurrencies while pushing investors toward the supposedly safer US Treasuries and gold.
According to David Jeong, CEO of Tread.fi, an algorithmic cryptocurrency trading platform for institutional traders, the market was going through a “black swan event.” According to Jeong, “many institutions probably did not anticipate this degree of volatility, and given the design of leveraged endless futures, many large traders, including institutions, would have been liquidated.” Crypto traders employ unchanging futures, a sort of contract with no expiration date, to trade leveraged positions continuously. “Fears of US-China tariffs sparked the market downturn, but institutional over-leverage fueled it,” said Vincent Liu, chief investment officer at Kronos Research. Liu continued, “This emphasizes the macro ties of crypto.” “Watch for indications of a rebound in cleared markets, but expect volatility.”
