President Donald Trump’s announcement of a potential 100% tariff on imports from China triggered a dramatic sell-off in cryptocurrency markets on Friday, exposing the high levels of leverage and risk in digital assets. The market turmoil wiped out $18.28 billion in crypto holdings, according to data from analysis platform CoinGlass.

Bitcoin, Ether, and Solana were among the hardest-hit digital currencies during this volatile session. Over the past 24 hours, roughly $5 billion in Bitcoin positions were liquidated, alongside $4 billion in Ether and $2 billion in Solana, reflecting traders’ urgent attempts to reduce exposure in a high-risk environment. CoinGlass described the event as “the largest liquidation in crypto history,” highlighting the scale of the market disruption.

Bitcoin fell sharply, dropping from $111,616.20 at 3:45 p.m. ET to a low of $103,000 earlier in the day, marking a nearly 10% decline over the past five days. Ether experienced an even steeper drop, tumbling 14.2% from $4,365.63 to $3,742.88, while Solana plunged nearly 20%, falling from $223.10 to $178.72. The sell-off came amid broader turbulence in traditional markets, as the Nasdaq and S&P 500 both recorded their steepest declines in six months.

The sudden market reaction reflects how sensitive cryptocurrencies have become to geopolitical developments and trade policy announcements. Trump’s tariff threat follows China’s escalation in export restrictions on critical rare earth minerals, which has heightened fears of a prolonged U.S.-China trade conflict. The ripple effects are felt not only in digital assets but across global equities and commodity markets.

Cryptocurrency markets have seen remarkable gains since Trump took office earlier this year. Initially dismissive of digital currencies as “based on thin air,” the president later embraced the crypto community, attending conventions, launching his own meme coin, and promising a strategic crypto reserve. A recent executive order allowing digital assets to be included in 401(k) retirement plans helped Bitcoin reach a record high of $124,000 just last week, underscoring the rapid rise in investor enthusiasm.

Despite these gains, Friday’s sell-off serves as a stark reminder of the volatility inherent in crypto markets, particularly when geopolitical risks and leverage combine to amplify market movements. Investors are now reassessing risk exposure, navigating an environment where sudden policy shifts can trigger dramatic market swings.