US Ether exchange-traded funds (ETFs) experienced record trading volumes on Monday. Leveraged positions in the digital asset fell sharply as most investors offset their holdings due to tariff tensions under President Donald Trump.
The group of nine ETFs saw a $1.5 billion trading volume, with BlackRock’s iShares Ethereum Trust nearly capturing half of the market activity. Ethereum, the second largest crypto by market value, dropped by almost 27% to trade at $2,135 on Monday. The drop set off liquidations totaling more than $600 million in perpetual futures markets.
US investors grasped the sharp drop, driving $84 million in net inflows into the Ether ETFs. Open interest in Ether futures contracts on CME Group Inc.’s derivatives exchange increased nearly 6%, indicating institutional interest.
Ether is vulnerable to leveraged trading dynamics due to its outsized role in DeFi markets
Ether’s deep decline is due to its active role in decentralized finance markets, which makes it vulnerable to leveraged trading dynamics. As of 11 a.m. on Tuesday in London, the digital currency was trading at about $2,767.
Trump’s administration’s temporary deal with trade partners Mexico and Canada, which delayed the proposed tariffs by one month, saw the selloff slowing down, leading to a partial market recovery. However, the market remained unstable for a while because China and the US imposed fresh tariffs on each other.
The fall of cryptocurrency at the beginning of the week shows how Trump has increased uncertainty in the crypto sphere. His moves have created several heart-stopping scenarios. Going by the current state, Trump’s presidency had seen all top digital assets go down sharply, contrary to when he won elections in November when all digital assets rallied.
Crypto-centric ETFs of all stripes, including those based on Bitcoin, have seen tremendous investor interest in the wake of Trump’s presidential victory, given his administration’s embrace of the digital assets industry.
Trump’s tariff threat sends crypto prices falling, including his meme coin
While most crypto lovers were jubilant with Trump’s presidency due to his open support for cryptocurrency, things may work differently. So far, the US is involved in trade wars with most of its trade partners, and cryptocurrency prices are taking big hits.
Bitcoin prices dropped from $105,000 on Saturday when Trump announced he would impose huge tariffs on goods from Canada, Mexico, and China. The number one crypto by market value saw a price drop to almost $92,000 on Sunday night before rising to $98,913.30 after Trump announced the suspension of the tariffs on Mexican and Canadian goods.
Bitcoin was resilient compared to other cryptos. Ethereum and other popular coins like Doge were hugely affected, and prices dropped drastically. Even Trump’s meme coin was not spared by the volatility, as it traded at $19, around 75% below its all-time high.
Meme coins saw significant growth after the US presidential elections. Most investors saw them as the next big asset, as they offered a green light for a crypto frenzy. However, some investors were reluctant to invest in meme coins, saying it would end in disappointment in the long run.
Trump is a former crypto skeptic who has since warmly embraced digital assets as a source of personal wealth and a matter of government policy. He’s promised to make the US the world capital of crypto and appointed several crypto-friendly officials to key government positions.
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