This article was originally published by Michael Snyder at The Economic Collapse Blog.
Was this just an isolated incident, or is this the beginning of the Big Crash? The carnage that we witnessed on Friday was absolutely breathtaking. The largest single-day wipeout in the history of the cryptocurrency industry was accompanied by a tech bloodbath of epic proportions.
Many investors who were very highly leveraged got absolutely monkey-hammered. In particular, wave after wave of forced liquidations caused a cascading cryptocurrency crash that was unlike anything that we have ever seen before. Approximately 19.2 billion dollars in leveraged positions were suddenly liquidated, and as a result, the collective value of all cryptocurrencies fell by almost 800 billion dollars in just 24 hours…
The cryptocurrency market suffered a massive wipeout, erasing nearly $800 billion in value within 24 hours. Around $19.2 billion in leveraged positions were liquidated as panic spread across exchanges.
Bitcoin plunged to $110,951, marking a 16% drop, while Ethereum slipped to $3,795, down more than 12%. The total crypto market capitalization fell to $3.69 trillion, its sharpest single-day decline in months. Altcoins were hit even worse. XRP fell 25% to $2.34, and Dogecoin dropped 28% to $0.18. Solana slid to $177, Cardano fell over 25%, and BNB lost ground, trading near $1,122.
This was basically a “1929 event” for cryptocurrencies.
I wish that I were exaggerating, but I am not.
Some lesser-known tokens lost nearly all of their value.
This is what happens when people borrow massive amounts of money and bet it on “sure things” that they think will never go down.
As Ash Crypto has aptly described, what we essentially witnessed was “a chain reaction in a highly leveraged game of musical chairs”…
We saw the biggest crash in the history of crypto with $19.2 billion liquidated and approx $800 billion in value wiped out across the board.
Altcoins were hit the hardest , with many dropping 50%or more in just hours.
Prices for some tokens, like IOTX on Binance, even briefly hit zero due to the chaos.
But what exactly started this crash?
To break it down simply, think of it like a chain reaction in a highly leveraged game of musical chairs.
When the music stops, a lot of players get forced out, making things worse for everyone.
A lot of people who believed that they were very wealthy on Thursday are now picking up the pieces.
But apparently, one crypto whale had advanced knowledge that the crash was coming…
- A crypto whale made over $160 million in profit by shorting Bitcoin and Ethereum on Hyperliquid ahead of Trump’s 100% China tariff announcement
- The trader closed all ETH short positions for $72.33 million profit and still holds $92.84 million in BTC shorts with 5.38x leverage
That is extremely suspicious.
Hopefully, authorities will look into that.
Also on Friday, the largest U.S. tech companies collectively lost 770 billion dollars in market capitalization…
Shares of Amazon, Nvidia and Tesla each dropped around 5% on Friday, as tech’s megacaps lost $770 billion in market cap, following President Donald Trump’s threats for increased tariffs on Chinese goods.
With tech’s trillion-dollar companies occupying an increasingly large slice of the U.S. market, their declines sent the Nasdaq down 3.6% and the S&P 500 down 2.7%.
When you add the losses in the cryptocurrency market to the losses in the stock market, you get a grand total that greatly exceeds a trillion dollars.
Ouch.
The primary reason why the financial markets are being shaken is because there have been shocking new developments in the trade war between the United States and China…
On Thursday, China’s commerce ministry said that starting on Dec. 1 a license will be required for foreign companies to export products with more than 0.1% of rare earths from China or that are made with Chinese production technology.
That prompted President Donald Trump to announce Friday that he will impose an additional 100% tariff on China and limit U.S. exports of software. But while it seemed like the latest tit-for-tat exchange in the U.S.-China trade war, there’s much more at stake.
As I discussed at the end of last week, this is extremely serious.
For years, the Chinese worked tirelessly to dominate the global rare earth marketplace, and now they have the ability “to forbid any country on Earth from participating in the modern economy”…
“We should not miss the fundamental point on rare earths: China has crafted a policy that gives it the power to forbid any country on Earth from participating in the modern economy,” Dean Ball, who served as a senior advisor in the White House Office of Science and Technology Policy earlier this year, wrote on X on Saturday.
“They can do this because they diligently built industrial capacity no one else had the fortitude to build. They were willing to tolerate costs—financial and environmental and otherwise—to do it. Now the rest of the world must do the same.”
China has a stranglehold on rare earths, producing more than 90% of the world’s processed rare earths and rare earth magnets. They are used across industries, from the tech sector to automakers and defense contractors.
While we were playing checkers, the Chinese were playing chess.
And so now we are in a world of hurt.
On Sunday, President Trump tried to reassure us that everything will be just fine.
But the Chinese are not backing down.
They are furious about the sanctions and the port fees that the U.S. is imposing, and they are warning that they are prepared to introduce even more “countermeasures”…
Donald Trump’s latest threat to impose an additional 100% tariff on Chinese goods is “a typical example of US double standards”, China’s government has said.
A commerce ministry spokesperson also said China could introduce its own unspecified “countermeasures” if the US president carries out his threat, adding it was “not afraid” of a possible trade war.
We are in far more trouble than most people realize.
This really could be the crisis that pushes the financial markets over the edge.
The stock market boom that we witnessed earlier this year was driven by AI, and the truth is that AI has now become the biggest financial bubble of all time. OpenAI is just one example of how absurd this AI bubble has become…
Fast forward, and OpenAI now has deals to build 16 gigawatts of data centers. Based on Wall Street estimates, they are likely to cost about $750 billion.
OpenAI has also committed to buying $300 billion worth of cloud computing services from Oracle over the next five years. Altogether, OpenAI is now on the hook for roughly $1 trillion of spending.
OpenAI may very well be the hottest start-up of all time—and there is a long line of investors looking to back them—but a trillion dollars is, to put it succinctly, nuts. It’s roughly 3.4% of 2024 U.S. gross domestic product and about a quarter of all nonresidential private investment.
All this from a start-up that still has large and growing losses. I’m a big believer in AI, but I still believe in math. And the numbers don’t add up.
Do you remember how bad it was when the “dotcom bubble” burst?
Well, this is going to be much, much worse.
At this stage our entire financial system is essentially a giant unsustainable Ponzi scheme, and nobody is going to be able to keep it from totally collapsing.
For many crypto investors, it is already too late to get out in time.
But most other investors still have a window of opportunity to get out before there is a mad rush for the exits, but that window of opportunity will not stay open for long.
Michael’s new book, entitled “10 Prophetic Events That Are Coming Next,” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.
About the Author: Michael Snyder’s new book, entitled “10 Prophetic Events That Are Coming Next,” is available in paperback and for the Kindle on Amazon.com. He has also written nine other books that are available on Amazon.com, including “Chaos”, “End Times”, “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”. When you purchase any of Michael’s books, you help to support the work that he is doing. You can also get his articles by email as soon as he publishes them by subscribing to his Substack newsletter. Michael has published thousands of articles on The Economic Collapse Blog, End Of The American Dream, and The Most Important News, and he always freely and happily allows others to republish those articles on their own websites. These are such troubled times, and people need hope. John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.” If you have not already done so, we strongly urge you to invite Jesus Christ to be your Lord and Savior today.
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