On February 3, 2025, the cryptocurrency market experienced a significant downturn, plunging nearly 9% within 24 hours, driven by escalating trade tensions following new tariffs announced by U.S. President Donald Trump. The overall cryptocurrency market capitalization fell to $3.06 trillion, reflecting an 8.8% overnight decline, while the 24-hour trading volume surged by 173% to $336 billion.
Bitcoin, which holds a 61% market share, dropped 3.1% to $96,264.88, approximately 12% below its all-time high. Ethereum saw a more drastic decline of 15.1%, trading at $2,630.39, around 46% below its peak from November 2021. Other major cryptocurrencies, including XRP and Solana, also faced substantial losses, with XRP falling 16.2% to $2.38 and Solana decreasing 7.2% to $197.56.
The market turmoil resulted in over $2 billion in liquidations, as analysts pointed to external economic pressures rather than internal market manipulation as the primary cause of the crash. This volatility has raised concerns about inflation and its potential impact on digital asset sentiment.