Former US President Donald Trump's threat to impose 100% tariffs on all Chinese imports, in response to Beijing's restrictions on rare earth metal exports, triggered a severe cryptocurrency market sell-off late last week.
Bitcoin plunged by as much as 15%, while altcoins led by Solana saw declines of up to 40%. The event resulted in nearly $20 billion in leveraged positions being liquidated, the largest such event in crypto history, amplifying the sell-off through cascading liquidations.
Despite the sharp drop, markets rebounded quickly, with Bitcoin recovering to around $115,000 by Monday, almost erasing the losses. Bitwise Chief Investment Officer Matt Hougan characterized the crash as "a blip" and not a sign of fundamental weakness, noting that crypto "got a passing grade" in handling the turbulence.
Hougan outlined that no major institutions collapsed, decentralized platforms like Uniswap, Aave, and Hyperliquid operated flawlessly without disruption, and the damage was largely confined to retail traders with highly leveraged positions. He emphasized that nothing fundamental to crypto's outlook—including technology, security, or regulatory progress—had changed, and the rapid recovery indicates market maturity.
Broader metrics support a positive long-term view: Bitcoin has gained 21% so far in 2025, and CryptoQuant's on-chain data shows Bitcoin's MVRV ratio at 2.0, indicating mid-cycle conditions rather than peak euphoria. Hougan expects the market to stabilize and renew focus on fundamentals, with the bull market continuing apace.
