Trump's tariff post triggers crypto crash, suspicious trades

Questions about information asymmetry in the cryptocurrency market were raised after a single social media post from the U.S. President wiped out billions.

Trump's threat to impose 100 percent tariffs on China triggered a massive cryptocurrency sell-off last Friday, sparking concerns that some may have profited from prior knowledge of the announcement.

The financial storm unleashed by the post shocked markets not only with its impact on stocks but also due to the "precision timing" of certain maneuvers within the crypto world.

According to data analysis platforms, an anonymous account on the crypto trading platform Hyperliquid placed large short positions on Bitcoin and Ethereum half an hour before President Trump's tariff threat was posted. Once the tweet was published, Bitcoin began to plummet, dropping to US$105,000 (HK$819,000) at one point – a 20 percent decline from its peak of US$126,000 last Tuesday. Ethereum fell even more sharply, down 30 percent from its high.

Data from platforms indicated that during this period, over 1.6 million leveraged investors globally were forced into liquidations, with estimated market value losses nearing US$20 billion.

Less than two days later, Trump appeared to change his tone. In a subsequent post on his personal social platform, he suggested there was no need to worry about China and that "everything will be fine," hinting that he might not significantly raise tariffs on Chinese goods.

This latest statement spurred a sharp rebound in Bitcoin and Ethereum prices from their lows. However, the anonymous account had already closed its positions at the market's lowest point, securing profits of nearly US$200 million.

Analysis from the crypto sector, cited by foreign media, indicates that the timing and scale of these trades before the market crash raise suspicions of potential information advantages. While there is no concrete evidence of insider trading, the account's actions demonstrated an extremely strong conviction that the market was about to fall.

This is not the first time the Trump administration has faced such allegations. Back in April, Trump's abrupt shifts on tariff policy caused US stocks to plummet and then rebound sharply, leading Democrats to question whether government insiders had profited from inside information and to demand an SEC investigation. The White House has repeatedly denied these allegations.