Altcoin market to shrink as Trump-linked coins collapse, liquidity issues persist
The cryptocurrency market recorded a historic plunge last week, erasing $131 billion (approximately 182 trillion Korean won). Bitcoin fell by 13%, while some altcoins plummeted by 80%, fueling investor panic. Market analysts attribute the crash to U.S. President Donald Trump’s remarks about imposing 100% tariffs on Chinese imports.
According to Bloomberg News and Cointelegraph on the 14th (local time), this collapse wiped out over a third of the total cryptocurrency market cap of approximately $380 billion. Notably, $131 billion vanished solely from the altcoin sector, reflecting structural vulnerabilities such as low liquidity and reliance on speculative trading. Trump’s tariff threats shocked global risk assets, prompting investors to offload most crypto assets, including Bitcoin, Ethereum, and meme coins. Immediately after Trump posted on his social media platform Truth Social, $20 billion worth of leveraged positions were liquidated across exchanges.
Cryptocurrency research firm 10x Research noted, “The market structure has collapsed rapidly,” adding, “Altcoins, lacking intrinsic value, have devolved into gambling arenas dependent on liquidity from a handful of traders.” The Trump-related meme coin ‘Trump Official’ plummeted by 37%, while World Liberty Financial (WLFI) Coin, linked to the Trump family, saw a similar decline. Some meme coins, traded based on social media memes like ‘Shiba Inu’ and ‘Pepe,’ collapsed instantly due to the absence of real demand.
Cointelegraph reported, “Liquidation heatmap data shows Bitcoin faced concentrated selling pressure around the $120,000 level, with some leveraged long positions exposed down to $98,000.” Open interest on centralized exchanges (CEX) dropped by 45% within a week, and traders are hesitating to enter new positions. One market analyst stated, “No one is confident about the bottom right now,” adding, “If Bitcoin fails to hold the $110,000 level, further declines are likely.”
Experts assessed the crisis as the largest structural adjustment since the 2022 Luna collapse. John Todaro, an analyst at investment bank Needham & Co., remarked, “Even major assets like Bitcoin and Ethereum are underperforming stocks and gold,” calling it an “abnormal market with excessive risk and low rewards.”
Meanwhile, the market views the afternoon of the 19th, when the Chicago Mercantile Exchange (CME) Bitcoin futures and U.S. stock futures open, as a potential turning point. If traditional financial markets intensify risk aversion, further declines are inevitable. Conversely, institutional buying could spark a short-term rebound.
Yevgeny Gaivoy, CEO of crypto market maker Wintermute, predicted, “This shock will structurally shrink the altcoin market,” adding, “An ecosystem based on speculative coins is no longer sustainable.” Bloomberg News noted, “This plunge may signal the end of the cryptocurrency speculation cycle, not just a short-term correction.”
