The crypto market looked unstoppable recently, but now we’re seeing that it wasn’t!
Just hours before U.S. President Donald Trump’s high-stakes peace talks with Ukraine and Russia, more than $534 million worth of crypto positions were liquidated, sending shockwaves through traders and wiping out weeks of gains.
A Brutal Flash Crash
Data from Coinglass shows the sell-off liquidated 127,029 traders. Longs were hammered the most, losing about $448 million, while shorts gave up another $86 million.
Bitcoin traders lost around $111 million, but it was Ethereum traders who suffered the deepest pain, with more than $211 million in liquidations. The single biggest hit came on Binance, where a $4.03 million BTC/USDT long vanished in one order.
Ethereum still trades around $4,300, but the heavy leverage in ETH positions means another breakdown could drag the broader market lower.
Why Did This Happen Now?
Markets were on edge ahead of Trump’s talks with Ukraine’s Volodymyr Zelensky and Russia’s Vladimir Putin. Many expected peace talks to boost risk sentiment, but instead, traders pulled money out before the headlines landed.
Analysts also point to sticky inflation, weaker hopes for Fed rate cuts, and profit-taking after a strong summer rally. In short: the peace talks may have been the spark, but the market was already primed for a shakeout.
Bitcoin’s History With War Headlines
This isn’t the first time geopolitics has rattled crypto. When Russia invaded Ukraine in February 2022, Bitcoin crashed 8% in hours – then roared back, rallying 27% above pre-war levels within a month.
That rebound came as traders closed short bets and demand for stablecoins like USDT and USDC spiked in regions facing sanctions and currency controls. Many of those funds later flowed into Bitcoin, fueling the recovery.
The pattern was first a panic, then a rethink, then a rebound once markets adjusted.
Also Read: Coinpedia Digest: This Week’s Crypto News Highlights | 16th August, 2025
What Peace Talks Could Mean for Bitcoin
Trump’s Alaska summit with Russia’s Putin did not bear an outcome and there was no agreement. However, three outcomes still stand out from future meetings/talks:
- A real ceasefire: Lower energy costs and inflation could give central banks room to cut rates. That’s a setup that usually helps Bitcoin, especially through spot ETF inflows.
- A shaky deal: Tensions cool but sanctions remain. Bitcoin could stay range-bound, moving more on ETF flows and halving effects than war headlines.
- Talks collapse: Expect another sharp drop across risk assets, followed by a recovery once safe-haven demand for stablecoins, and eventually Bitcoin, picks up.
The Bigger Picture
Global markets are just as sensitive. Europe’s energy crisis, food inflation, and currency swings all tie back to the war. A ceasefire could ease inflation and support the euro, but as Zurich Insurance strategist Guy Miller warned: “The big issue will be, of course, that even if we get a ceasefire, how sustainable is that?”
In 2025, Bitcoin is a geopolitical asset too. The next big move may depend less on miners and ETFs, and more on what gets decided across countries and leaders.
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