Trade war tumult
What's being bought and sold*
TOP TRENDING ASSETS
*Trading activity in the past 24 hours on the Uphold platform, as of 8 a.m. 3rd February 2025.
The combined total of buy and sell percentages can exceed 100% due to customers who engage in both buying and selling the same asset within the 24-hour time frame.
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What’s up
Crypto Liquidations Reach $2B After Trump Imposes Tariffs
Tensions are running high around the world and risk is coming off the table after U.S. President Donald Trump hit Canada, Mexico and China with tariffs. Oil futures are in the green.
As for the rest of the financial markets? Not quite a bloodbath. As of 6:49 a.m. (EST), Dow futures in pre-market trading had shed 575 points. Bitcoin fell 4% to $95.3K. That's over the past one day. Total crypto assets are down 9% to hit $3.23 trillion. The crypto futures market saw $2.2 billion in liquidations. Stupidest trade war, ever, was the quick take from The Wall Street Journal's editorial board. The Trump administration insists tariffs connect with efforts to stop the flow of fentanyl.
Last Monday, it was DeepSeek and the dawn of inexpensively developed AI that stirred consternation and caused a mass dumping event. Today's tizzy owes to an economic superpower slapping stiff taxes on imports from a trio of major trading partners, threatening to stoke fresh rounds of global inflation.
In Europe, possibly next in line for Trump-imposed tariffs, inflation shot up unexpectedly to 2.5% in January largely because of higher energy costs, according to data from Eurostat.
What's down
Major Pain
A couple of DEX platforms can boast of positive moves this morning. Everything else is bleeding red. We're talking major pain.
Ethereum plunged 16% to $2,600. XRP also lost 16%, falling to $2.38. The sharp declines started on Sunday in Asia where traders in Hong Kong came back to the office after an extended Lunar New Year holiday. Markets in mainland China remain closed until tomorrow. Tariffs could further roil the Chinese economy, already grappling with ebbing domestic consumption and a real estate crisis (Yahoo Finance).
What's next
Bracing For Impact
A plunging futures markets and a tanking in crypto together suggests that traders expect "significant turbulence when U.S. markets open on Monday," Decrypt said.
The overriding concern right now is that an import tariff war between the U.S. and its top trading partners will cause inflation, handcuffing central banks from lowering interest rates any time soon.
Decrypt found some analysts who say crypto concerns are overblown while other industry luminaries seem jazzed about the outlook for dollar-pegged stablecoins.
"There was always going to be extra volatility early on," Merkle Tree Capital CIO Ryan McMillin told Decrypt. “In the short term, we’ve bottomed," he added. "Market makers have used this tariff news cycle to sweep the leveraged longs and there is now very little liquidity worthy of pushing prices lower,” McMillin said.
Worst-case scenarios aren't exactly apocalyptic. But there's potential harshness for which to prepare. By the end of March, Bitcoin's spot price could see as much as $20K get lopped off, at least according to a growing number of on-chain options traders.
Last week, there was only a 10% chance of BTC falling to $75,000 by the end of March, based on directional trends in the options world. The odds of such a tanking are now 22% (CoinDesk).
