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Around $500 billion has been wiped out of the crypto market in the past 24 hours ahead of Trump’s tariff deadline.

XRP, Cardano (ADA), and Solana (SOL)—the three leading crypto assets that posted major gains on Trump’s proposed crypto reserve—have now suffered steep losses, posting double-digit declines as market sentiment shifts.

According to data from CoinGecko, XRP dropped 17% in the last 24 hours, erasing gains that followed Trump’s earlier statement about including the crypto asset in the US reserve. The asset had previously surged over 25%, reaching nearly $3.

ADA and SOL experienced similar declines, falling approximately 25% and 20% respectively. ADA, which had surged over 75% to above $1 on Sunday, retreated below $0.8. SOL declined from $177 to $135.

The total crypto market cap has shrunk by over 12% over the past 24 hours. Bitcoin, after surging past $94,000 on Sunday, has pulled back. The digital asset is now trading at around $83,700, down almost 10%.

The second largest crypto asset, Ethereum, is down around 15%, while plenty of lower cap coins are down even further.

Tariffs on Canada and Mexico to take effect tomorrow

Trade war fears swiftly extinguished the hype that had built up around the US crypto reserve.

The market downturn intensified after Trump confirmed that 25% tariffs on Canada and Mexico each would take effect on Tuesday.

“They’re going to have to have a tariff. So, what they have to do is build their car plants — frankly — and other things in the United States, in which case they have no tariffs,” Trump stated.

Regarding China, the White House also announced a 20% tariff on Chinese imports. Initially, a 10% tariff was imposed, and as of March 4, 2025, an additional 10% tariff has been added.

This marks a sharp escalation in the U.S.-China trade war, with tariffs increasing much faster than during Trump’s first term.

These tariffs raise the cost of trade between the US, Canada, and Mexico, which could hurt businesses and economic growth.

Economic growth forecasts slashed

The US economy may be contracting at its fastest pace since the COVID-19 lockdown, according to the Federal Reserve Bank of Atlanta’s GDPNow model, which now projects a 2.8% decline in gross domestic product for the first quarter of 2025.

Just a month ago, the same model estimated the economy was on track for nearly four percent growth. While GDP forecasts can be volatile, other economic indicators—such as a record-high trade deficit, falling consumer confidence, and slowing spending—reinforce concerns about a deepening slowdown.

If realized, this contraction could mark the beginning of what some analysts are calling a “Trumpcession,” drawing comparisons to the sharp economic decline of 2020.

How did these affect crypto?

According to The Kobeissi Letter, mounting economic uncertainty and trade war fears have already weighed on financial markets.

The real driver here is the GLOBAL move towards the risk-off trade.

As trade war tensions rise and economic policy uncertainty broadens, ALL risky assets are falling.

This was seen in stocks, crypto and oil prices which all fell sharply today.

Safe havens are thriving. pic.twitter.com/qUFfcdWNgy

— The Kobeissi Letter (@KobeissiLetter) March 4, 2025

The financial markets have experienced a sudden sell-off in the past few hours, and the downturn was largely driven by weakness in the US stock market, triggered by recent announcements from President Trump.

The stock market downturn spilled over into crypto, as investors sold off risky assets in response to economic uncertainty. Higher tariffs could slow economic growth, reducing investor appetite for speculative assets like Bitcoin and altcoins.

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Bitcoin hit a low of $79,500 on Binance on Thursday, marking a 26% decline from its January peak, as broader market risk aversion continues to pressure crypto assets.

The leading digital asset could retreat to $70,000 — a level not seen since Election Day — if it fails to reclaim $90,000, according to Wolfe Research.

A drop to the mid-$70,000 range is possible, Wolfe analyst Read Harvey warned, noting that a break below the key $91,000 support signals a bearish turn, and current price action is concerning.

“$91,000 acted as the floor over the past several months. With that level now decisively taken out, anything less than another V-shaped oversold response would send a very bearish message. So far not so good,” Harvey stated, as reported by CNBC.

If bearish sentiment intensifies, Harvey predicts prices could fully reverse to their pre-election levels.

President Trump’s decision to impose tariffs on major trading partners, including Mexico, Canada, and China, has ignited concerns about an economic slowdown, despite earlier optimism following the election, inauguration, and executive order on crypto.

When investors are feeling uncertain about the economy, they tend to de-risk, with consequences spanning stocks, commodities, and crypto assets, according to Harvey.

“Uncertainty is at the forefront of investors’ concerns and the willingness to take on risk is rapidly waning,” the analyst said.

“The crypto market is feeling the pressure, with both major and altcoins experiencing significant selloffs, and traders are responding by seeking safety over upside gains. In particular, the demand for downside protection has surged,” said Nick Forster, Derive Protocol’s founder, in a Thursday note.

According to Forster, the massive outflows from spot Bitcoin ETFs signal growing risk aversion among institutional investors. The exodus is fueling selling pressure across the crypto market, raising concerns about a potential negative feedback loop where cascading sell-offs further depress prices.

“The fear is that this could create a negative feedback loop, where continued selling drives more selling, further driving prices lower,” he said.

Trust issue

The crypto industry continues to face trust challenges despite regulatory progress and technological improvements, according to Magic Eden co-founder Jack Lu.

Recent weeks have seen positive developments in crypto regulation, including Congressional efforts to establish an industry framework. However, consumer confidence remains elusive amid ongoing security incidents and fraudulent schemes.

The Libra scandal has eroded trust among investors. Kelsier Ventures, led by CEO Hayden Davis, is now seen as a key player in a network of fraudulent schemes. The firm has been allegedly linked to multiple meme coin projects, including tokens like MELANIA and others.

Cybersecurity vulnerabilities are still a major concern, especially in light of the recent attack targeting Bybit. Even with regulation, the regulation itself is seen as less protective than traditional financial regulation, American University Washington College of Law professor Hilary Allen told Bloomberg.

The crypto market’s total capitalization dropped below $3 trillion, a low not seen since November, and market sentiment, as indicated by the Fear and Greed Index, is still deeply pessimistic.

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BlackRock moved 5,100 Bitcoin worth approximately $441 million and 30,000 Ether valued at about $71 million to Coinbase Prime within the last hour, as tracked by Arkham Intelligence.

The transfer follows BlackRock’s Tuesday movement of $160 million in Bitcoin and $44 million in Ethereum to Coinbase Prime, amid mounting pressure on BlackRock’s flagship Bitcoin ETF, the iShares Bitcoin Trust (IBIT).

IBIT has experienced negative performance for three consecutive days, with approximately $741 million in net outflows so far this week, based on Farside Investors data. US-listed spot Bitcoin ETFs recorded their largest single-day outflows of over $1 billion on Tuesday, with IBIT accounting for $164 million of the withdrawals.

Given the recent Bitcoin ETF sell-off, with IBIT posting negative performance for three consecutive days, the deposit raises concerns about further liquidations.

The latest transfers come as Bitcoin recovered slightly above $86,000 after dropping to $83,000 on Tuesday, its lowest level since November 2024.

BitMEX co-founder Arthur Hayes previously warned that hedge funds employing an arbitrage strategy—long IBIT and short CME futures for enhanced yield—pose a potential risk to Bitcoin’s price.

He cautioned that if the basis spread narrows during a Bitcoin decline, these funds might sell IBIT and buy back futures, potentially driving the price towards $70,000.

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US spot Bitcoin ETFs posted around $935 million in net outflows on Tuesday, extending their losses so far this week to approximately $1.5 billion.

The massive withdrawal continued during a sharp crypto market sell-off, with investors retreating from risk assets in dealing with growing macroeconomic concerns after President Trump’s tariff threats.

According to data combined from Farside Investors and Trader T, Fidelity’s FBTC led the exodus with around $344 million in outflows, followed by BlackRock’s IBIT with almost $162 million in redemptions.

Meanwhile, Bitwise’s BITB and Grayscale’s BTC each recorded over $85 million in net outflows.

Franklin Templeton’s EZBC lost $74 million, with Grayscale’s GBTC and Invesco’s BTCO declining by $66 million and $62 million respectively.

Competing funds managed by Valkyrie, WisdomTree, and VanEck also reported net outflows.

Intense outflows eclipsed the previous record set on Dec. 19, when the group of spot Bitcoin ETFs saw nearly $672 million in withdrawals after Bitcoin sank below $97,000.

The withdrawals surpassed the previous record of $672 million set on December 19, marking the sixth consecutive day of outflows for the ETF group, which saw $539 million withdrawn on Monday.

Bitcoin touched $86,000 today, its lowest level since November, and currently trades at $88,000, down 7% over the past week, per TradingView. The total crypto market cap has declined 3.5% over the past 24 hours.

The steep decline across all assets triggered $1.6 billion in leveraged liquidations on Monday, Crypto Briefing reported.

Former BitMEX CEO Arthur Hayes warned of a potential market downturn as hedge funds unwind their basis trades involving Bitcoin ETFs.

“Lots of $IBIT holders are hedge funds that went long ETF short CME futures to earn a yield greater than where they fund, short term US treasuries,” Hayes said. He cautioned that if Bitcoin’s price falls, “these funds will sell $IBIT and buy back CME futures.”

The market turmoil follows President Trump’s reactivation of tariffs on goods from Mexico and Canada, which reignites inflation fears, pushing investors away from risk assets.

The Crypto Fear and Greed Index, a measure of crypto markets’ sentiment, has dropped from 25 to 21, remaining in the “extreme fear zone.”

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Bitcoin’s drop to $86,000 led to the liquidation of $1.6 billion in trading positions over the past 24 hours, according to Coinglass data.

The drop is attributed to President Donald Trump’s renewed tariff threats against Mexico and Canada and a significant selloff of Bitcoin ETFs.

A $500 million Bitcoin ETF selloff intensified the market downturn, leading to widespread liquidations across major digital assets. The price decline marks Bitcoin’s first drop below $86,000 since November.

Feb 25 Update:

10 #Bitcoin ETFs
NetFlow: -5,474 $BTC(-$485.98M)🔴#Fidelity outflows 2,620 $BTC($232.58M) and currently holds 204,180 $BTC($18.13B).

9 #Ethereum ETFs
NetFlow: -4,109 $ETH(-$9.91M)🔴#Bitwise outflows 3,658 $ETH($8.83M) and currently holds 98,642 $ETH($238M).… pic.twitter.com/iNdwSiZIsA

— Lookonchain (@lookonchain) February 25, 2025

The liquidation event affected between 286,534 and 367,789 traders, with long positions bearing the majority of losses ranging from $144 million to $1.4 billion.

Bitcoin, Ethereum, and XRP were among the most impacted digital assets.

This event follows a larger liquidation on February 3, 2025, when over $2.2 billion in leveraged positions were wiped out, affecting approximately 729,073 traders.

During that event, Ethereum traders experienced over $600 million in losses, while Bitcoin traders faced $409 million in liquidations.

Trump’s latest statements on trade policy, which revived discussions from his February 3 announcement, have heightened concerns about economic disruptions.

The combination of trade policy uncertainty and institutional investor outflows has contributed to increased volatility across crypto markets.

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Today, BlackRock transferred 18,168 Ethereum ($44 million) and 1,800 Bitcoin ($160 million) to Coinbase amid growing market uncertainty and widespread liquidations in crypto markets.

The deposit comes as Bitcoin fell below $86,000 for the first time since November, while crypto markets experienced $1.6 billion in liquidations over the past 24 hours.

Large entities moving significant amounts of crypto to exchanges are often seen as a signal that they may be preparing to sell.

This trend can lead to further price drops, as other investors may interpret such moves as a sign of weakening confidence or an impending decline.

Market pressure intensified following a $500 million Bitcoin ETF sell-off, coupled with renewed tariff threats from President Donald Trump.

The Crypto Fear and Greed Index dropped to 25, indicating extreme fear and marking its lowest level since September 2024.

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Bitcoin’s slide to a multi-week low sparked a $950 million liquidation wave on crypto exchanges. The sell-off followed President Trump’s statement indicating reactivated Canada and Mexico tariffs, ending a month-long pause and, again, raising inflation concerns.

Trump said Monday that tariffs on imports from Canada and Mexico will be implemented next month, ending a monthlong suspension of planned import taxes.

The 25% tariff on Canadian and Mexican goods will begin in early March 2025, affecting over $900 billion worth of US imports including automobiles, auto parts, and agricultural products.

“We’re on time with the tariffs, and it seems like that’s moving along very rapidly,” Trump said at a White House news conference with French President Emmanuel Macron. “The tariffs are going forward on time, on schedule.”

Trump has maintained that other countries impose unfair import taxes that harm domestic manufacturing and jobs. While he claims the tariffs would generate revenue to reduce the federal budget deficit and create new jobs, his threats have raised concerns among businesses and consumers about a potential economic slowdown and accelerating inflation.

The tariff announcement immediately triggered crypto market volatility.

The price of Bitcoin fell below $95,000 and continued sliding to around $91,000, while Ethereum dropped 11% to $2,500, according to CoinGecko data.

The broader crypto market saw widespread losses, with the total market capitalization declining by approximately 8%.

The market turmoil resulted in $880 million in long position liquidations over 24 hours. Ethereum traders suffered $255 million in losses, while Bitcoin traders experienced $185 million in liquidations, according to Coinglass data.

Most altcoins posted double-digit losses. XRP fell 10%, while SOL dropped almost 16%. DOGE declined 13%, and ADA fell 11%. BNB decreased by around 6% in the last 24 hours.

Bitcoin reserve bills fail in multiple US states

Elsewhere, the push for states to hold Bitcoin as part of their reserves has hit a wall. Bitcoin reserve bills have been defeated in Montana, North Dakota, Wyoming, and South Dakota.

Montana’s House Bill 429, which sought to allocate up to $50 million to Bitcoin, precious metals, and stablecoins, was defeated in a decisive 41-59 vote.

North Dakota’s HB 1184, designed specifically for a Bitcoin reserve, met a similar fate, falling short with a 57-32 rejection.

Wyoming lawmakers also rejected HB 0201, which would have empowered the state treasurer to invest public funds in Bitcoin, by a 7-2 margin.

In South Dakota, HB 1202, proposing a 10% Bitcoin allocation, was effectively stalled when legislators employed a procedural maneuver to delay the vote beyond the session’s deadline.

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