The global cryptocurrency market just saw one of its biggest crashes ever. In just four hours, over $128 billion (â‚ą10.6 lakh crore) in investor money disappeared from the market. Prices of Bitcoin, Ethereum, and many other coins fell sharply, leaving investors shocked and worried.
Let’s break down what caused this sudden fall, how it happened, and what Indian investors need to know.
đź’Ą What Actually Happened?
On Thursday morning, Bitcoin — the world’s most popular cryptocurrency — dropped from around $121,000 to $105,000 within a few hours. Ethereum also fell badly, along with other coins like Solana, Cardano, and many lesser-known tokens.
This caused panic among traders worldwide. On Indian exchanges like WazirX and CoinDCX, prices also dropped heavily. Thousands of Indian investors saw their portfolios lose value in minutes.
The Main Reason: Donald Trump’s Trade Announcement
The crash started soon after Donald Trump, the former U.S. President, announced 100% import tariffs on Chinese goods. He also said the U.S. would block China’s access to certain American technologies.
These announcements created fear in the global markets. Investors became nervous and started pulling out money from risky assets — and cryptocurrencies are among the riskiest.
So, a global political issue directly affected crypto prices — showing how international news now plays a major role in crypto performance.
🧨 The Real Damage: Leverage Liquidations
But the real reason the crash became so big is due to leverage.
In simple terms, many crypto traders use borrowed money (called leverage) to buy more coins and try to earn bigger profits. But when prices fall, their losses increase very fast.
If the losses cross a certain limit, exchanges automatically sell their holdings to recover the money. This is called liquidation.
In the last 24 hours, over $19 billion worth of leveraged positions were forcefully closed. These automatic sell-offs pushed prices down even further.
It became a chain reaction:
→ Prices fall
→ Traders get liquidated
→ More sell orders
→ Prices fall more
This is how the crash got worse in just a few hours.
📉 Small Coins Hit Hardest
While Bitcoin and Ethereum fell around 15-20%, many smaller altcoins and DeFi tokens (used in decentralized finance) dropped by 40–80%. Some tokens became almost worthless on certain exchanges.
This hit Indian investors who had invested in trending coins hoping for quick profits.
🪙 Even Stablecoins Were Shaken
Even some stablecoins — which are usually supposed to stay equal to $1 — lost their peg for a short time. This shows how deep and widespread the panic was.
On some exchanges, users were not able to withdraw or trade due to system overloads and technical issues.
đź“Š Lack of Liquidity Made It Worse
Another reason the crash got so bad is due to low liquidity.
In crypto markets, if there aren’t enough buyers or sellers, prices can move wildly with even small orders. During the crash, many buyers backed out, so sell orders could not be matched — leading to steeper price drops.
This is why exchanges and trading platforms struggled to manage the situation.
🏛️ Global Regulators Watching Closely
Just a few days before the crash, the Financial Stability Board (FSB) — a global body that monitors financial systems — said that crypto markets are still risky and need better regulations.
They especially warned about over-leveraged trading and weak rules in many countries. This crash will likely push governments, including India, to bring stronger regulations.
In India, the Crypto Bill is still pending, and the RBI continues to raise concerns about crypto risks.
🤔 What Should Indian Investors Do?
The market is slowly recovering now. Bitcoin has come back above $114,000, and other coins are trying to bounce back. But experts say volatility will continue.
So what can you do?
âś… Do:
- Stay calm and avoid panic selling.
- Re-evaluate your investments — are they long-term or short-term bets?
- Use low or no leverage — especially in such uncertain markets.
- Diversify your portfolio beyond just crypto.
❌ Don’t:
- Don’t invest based only on social media hype.
- Don’t try to time the bottom or go “all in”.
- Don’t borrow money to invest in crypto.
đź“Ś Key Takeaways for India
- The crash was triggered by Donald Trump’s China tariff announcement, showing how global politics affect crypto.
- Over â‚ą10.6 lakh crore (or $128 billion) was lost in just four hours.
- $19 billion worth of trades were force-liquidated due to high leverage.
- Smaller coins and DeFi tokens saw the biggest losses.
- Investors must be careful with leverage, avoid hype, and focus on long-term planning.
đź“Ł Final Thoughts
This crash has reminded everyone — especially new investors in India — that crypto is not a “get-rich-quick” scheme. It is a high-risk, high-reward market that moves fast, both up and down.
Global news, government policies, and trading strategies all impact prices. So before investing, always do your own research and invest only what you can afford to lose.
Crypto may still have a strong future — but only for those who treat it with caution and respect.
