The cryptocurrency market saw a recovery on Monday, a few days following the most significant crypto liquidation event ever recorded. Bitcoin has risen 3% in the last 24 hours, now approaching $115,000, as reported by Binance. Ethereum, which ranks as the second-largest cryptocurrency globally by market value, has seen an even greater increase, climbing nearly 9% to trade around $4,130. Having fallen below $4 trillion on Friday, the aggregate market capitalization of all cryptocurrencies has rebounded by almost 5% in the past day, reaching $4.01 trillion.
TL;DR
- Crypto market value recovered to $4.01 trillion after a $19 billion liquidation event.
- Bitcoin rose 3% to nearly $115,000; Ethereum increased nearly 9% to $4,130.
- USDe stablecoin briefly depegged to 65 cents on Binance before recovering.
- Market turbulence followed President Trump's trade threats against the People's Republic of China.
Crypto prices rebounded after a terrible Friday where over $19 billion in trader positions vanished. This marked the largest largest single-day liquidation event ever recorded by crypto analytics firm CoinGlass. Within a 24-hour period, Bitcoin's market cap decreased by over $200 billion, and its price fell by nearly 10%. Ethereum experienced an even steeper decline, 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 China on rare earth metals and related technologies. The country is the largest producer of rare earths in the world, which include metals needed for the production of everyday technologies like batteries and flat-screen TVs, and even fighter jets.
However, soon after Trump's trade warnings to China on Friday, he and his administration softened some of their most forceful language. He tweeted on Sunday on Truth Social, "Don't worry about China, it will all be fine!" “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 de-escalated” 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 seen a positive reaction. Following a 3% decline on Friday, the S&P 500 began Monday with a 1% increase.