Record liquidations hit crypto markets, with major coins like Ether and Bitcoin suffering steep losses in a single day.
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| Bitcoin, Ether, and other top cryptos plunge amid $2.24 billion in liquidations and new global tariffs. |
Finance Desk --- February 6, 2025:
Global cryptocurrency markets experienced their largest-ever single-day decline, with over $2.24 billion liquidated in the past 24 hours, according to Coinglass, a platform that tracks crypto exchange transactions. The wave of liquidations affected more than 730,000 traders and was sparked by a combination of factors, including new trade tariffs announced by U.S. President Donald Trump.
Liquidation occurs when a trader's position is forcibly closed due to insufficient funds, often triggered by a margin call. In this case, nearly 37% of the liquidations took place on the Binance exchange, followed by other platforms like OKX, Bybit, Gate.IO, and HTX.
The financial fallout comes amid growing concerns over escalating trade tensions. Trump's new tariffs on imports from Canada, Mexico, and China, along with threats to expand them to the EU and the UK, contributed to a sell-off in risk assets, impacting digital currencies significantly.
Several major cryptocurrencies were hit hard. Ether, the second-largest crypto by market cap, dropped nearly 20%, briefly falling to $2,520 before recovering to $2,611. Bitcoin saw a 6.5% drop, hitting a low of $92,500 before bouncing back to $95,484. Cardano and Ripple also experienced steep declines, falling by more than 19% and 16%, respectively.
Overall, the cryptocurrency market capitalization plunged by nearly 9%, dropping to $3.24 trillion. The total trading volume for the past 24 hours reached $401 billion, according to CoinGecko, which tracks over 17,000 cryptocurrencies.