TL;DR
- U.S. Ethereum ETFs reached a record volume of $1.5 billion following the liquidation of leveraged positions.
- Ethereum fell 27% to $2,135, triggering $600 million in liquidations, although it partially recovered after a temporary trade agreement.
- Trade tensions between the U.S. and China, combined with leverage-driven volatility, intensified instability in the crypto market.
U.S.-based exchange-traded funds (ETFs) focused on Ethereum (ETH) reached historic trading volumes after a sharp liquidation of leveraged positions.
This record occurred amid escalating trade tensions under Donald Trump’s administration, generating significant uncertainty in financial markets. BlackRock’s iShares Ethereum Trust accounted for nearly 50% of the market activity, contributing significantly to the $1.5 billion traded across nine Ethereum ETFs.
Ethereum Struggles Amid Trump’s Trade War
Ethereum (ETH) experienced an abrupt 27% drop, reaching $2,135. Currently, it has only recovered a portion of its losses, trading at $2,780 per unit, with a 4% gain in the last session—still well below previous levels around $3,400.
This decline triggered over $600 million in liquidations in perpetual futures contracts. Despite the high volatility, U.S. investors seized the price dip, injecting $84 million into Ethereum ETFs. Additionally, open interest in ETH futures contracts on CME Group rose by 6%, reflecting renewed institutional interest.
The Achilles’ Heel: Leverage
Analysts attribute Ethereum’s volatility to its key role in decentralized finance (DeFi), where leverage significantly impacts price fluctuations. Although the cryptocurrency managed a partial recovery after a temporary agreement between the U.S., Mexico, and Canada to delay new tariffs, conditions worsened when the U.S. and China imposed new tariffs on each other.
Awaiting New Regulatory Policies
Trump’s trade policies have exposed the crypto market’s sensitivity to global macroeconomic factors. While his administration has shown a favorable stance toward digital assets, the uncertainty stemming from economic decisions has negatively impacted the performance of major cryptocurrencies so far this year.
For now, the market awaits updates on regulatory matters. The Trump administration has outlined plans to position the U.S. as the dominant force in the crypto industry. However, there is still a long way to go to achieve a more favorable and stable environment
