Crypto Market Crash: Why Trump's China-Tariff Announcement Wiped Billions — Deepak Shenoy Answers

Deepak Shenoy, chief executive officer of Capitalmind Asset Management Company Mutual Fund, has given his perspective on the wide selloffs that took place in the global bitcoin market after US' China tariff announcements.

Shenoy said on Monday that there was enough leverage taken by bitcoin traders to make big bets that when the price dropped for cryptocurrency, they all liquidated their assets in a chain reaction to cover the potential loss.

"Apparently though, there's enough leverage in the bitcoin world that has an auto sell model when prices fall. When leverage runs high you just have to trigger a liquidation and it's a domino effect?"

He was replying to a comment from Helios Capital founder Samir Arora regarding why a non-equity asset like bitcoin saw a downturn of 8.4% and how it was connected to the tariffs imposed on China by Trump.

"It's true, usually bitcoin should go up in times of uncertainty," Shenoy said.

Trump made an announcement last Friday that the US will enforce 100% tariffs on China in the area of its tech exports and strict export controls on critical software.

This was done in response to China's allegedly hostile trade tactics regarding rare earth minerals. This declaration had a major impact not just on bitcoin but the wider US stock market as well, with the S&P 500 Index dipping 2% on Friday.

Coinglass reported that more than 1.6 million crypto traders liquidated their assets within 24 hours with $7 billion in positions sold off within an hour. Times of India quoted Brian Stugats, Multicoin Capital's head trader, as saying that total liquidations could go past $30 billion.

The prominent bitcoin currencies that saw a downturn are as follows, ethereum reduced by 5.8% to $3,637, binance coin went down 6.6% to $1,094.09, XRP lost 22.85% to $2.33, with its market cap going down16.31% to $140.19 billion, tether was down by 0.1% to $1.