The crypto market bounced back on Monday, just days after traders experienced the worst crypto liquidation event in history. Bitcoin is up 3% over the past 24 hours to now near $115,00, according to data from Binance. Ethereum, the world’s second largest cryptocurrency by market capitalization, is up even more, gaining almost 9% to hover near $4,130. After dipping below the $4 trillion mark on Friday, the total market capitalization of all cryptocurrencies have swung back nearly 5% over the past day to $4.01 trillion.
The ricochet in crypto prices follows a disastrous Friday that saw more than $19 billion in traders’ positions evaporate. It was the largest one-day liquidation event ever tracked by the crypto analytics company CoinGlass. In less than 24 hours, Bitcoin shed more than $200 billion in market capitalization and dropped nearly 10% in price. And Ethereum was hit even harder, dropping almost 14%.
The market chaos even affected stablecoins, or cryptocurrencies pegged to the U.S. dollar. USDe, one of the largest stablecoins by market capitalization, depegged to 65 cents on the crypto exchange Binance before quickly rebounding back to $1. The depegging event was only connected to Binance, not other exchanges, Guy Young, founder of Ethena Labs, the developer behind USDe, said Sunday.
The market turbulence follows a Friday social media post from President Donald Trump in which he threatened the People’s Republic of China with a 100% tariff “over and above” existing tariffs levied against the country. “It has just been learned that China has taken an extraordinarily aggressive position on Trade in sending an extremely hostile letter to the World,” claimed Trump on Truth Social, the social media website his family owns.
Trump’s post came in response to recent trade restrictions imposed by the People’s Republic on rare earth metals and related technologies. The country is the largest producer of rare earths in the world, which include metals needed for production of everyday technologies like batteries, flat-screen TVs, and even fighter jets.
But, shortly after Trump issued his trade threats against China on Friday, he and his administration walked back some of his most aggressive rhetoric.”Don’t worry about China, it will all be fine!” he posted Sunday on Truth Social. “The U.S.A. wants to help China, not hurt it!!!”
U.S. Treasury Secretary Scott Bessent echoed Trump in a Monday morning interview with Fox Business. While Bessent criticized China’s rare earth restrictions, he said that the administration has “substantially deescalated” trade tensions with China since Trump’s threats and that there’s been “substantial communication” over the weekend.
“I believe China is open to discussion on this,” Bessent added.
The stock market has responded favorably. After tanking 3% on Friday, the S&P 500 opened Monday up 1%.
