- The crypto market faced a sharp sell-off after President Trump threatened 100% tariffs on China and new export controls.
- More than $19 billion in leveraged positions were liquidated in one day, impacting over 1.6 million traders.
- Bitcoin dropped 16% to below $105,000 before recovering to $112,000; altcoins fell as much as 80%.
- Binance users reported failed transactions, leading the exchange to pledge compensation for losses tied to its system outages.
- Decentralised exchanges and lending protocols, including Uniswap and Aave, operated smoothly and handled record volumes during the crisis.
A major downturn struck the crypto market on Friday as U.S. President Donald Trump announced the possibility of 100% tariffs on Chinese goods, combined with new export restrictions on software. This announcement triggered one of the largest sell-offs in recent years and led to widespread disruptions for traders around the world.
Data showed over $19 billion in heavily leveraged positions were liquidated within a single day, according to CoinGlass. In total, more than 1.6 million traders were affected, with $7 billion in liquidations occurring in just one hour. The price of Bitcoin, which had reached $125,000 earlier in the week, dropped 16% to below $105,000 before partially rebounding to $112,000 on Saturday. Other digital assets, known as altcoins, lost between 30% and 80% of their value.
Many users of centralised exchanges such as Binance reported failures to execute trades and close positions as market volume surged. Binance acknowledged these technology issues and stated it would compensate users for losses directly caused by its system failures. Yi He, co-founder and chief customer service officer, said in a statement, “If you have incurred losses attributable to Binance, please contact our customer service to register your case. We will review your account activity individually, analyze the situation, and provide compensation accordingly.”
However, the company clarified that losses from normal market movements or unrealized profits are not eligible for compensation. The exchange experienced disruption as a result of both sudden market fluctuation and a spike in user activity.
While centralised exchanges struggled, decentralised protocols processed record volumes without system failures. Uniswap, the leading decentralised exchange, recorded $10 billion in daily trading, according to DefiLlama. Aave, a top lending protocol, liquidated over $180 million in collateral within an hour, a move its founder Stani Kulechov described as a “stress test” of the system’s infrastructure. Protocol fees on Aave jumped to $15 million in one day from an average of $3 million, as shown by DefiLlama data.
Despite the record activity, DeFi protocol liquidations remained a small part of the total, amounting to a few hundred million dollars. Michael Bentley, co-founder of lending protocol Euler, stated, “That stress test was wild, but DeFi worked flawlessly. No emergency circuit breakers. No regulatory interventions. Just free markets and code.”
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