Markets on Edge: Bitcoin Plunges 7%, Stocks Mixed as Trump Teases Fed Pick and Shutdown Deal
Financial markets in Asia opened to a turbulent Friday, with Bitcoin leading a steep sell-off in digital assets and regional equities showing mixed performance. The volatility followed signals from Washington, where President Donald Trump endorsed a bipartisan agreement to avoid another government shutdown and announced he would soon reveal his nominee for the next Federal Reserve Chair.
The cryptocurrency market bore the brunt of the selling pressure. Bitcoin tumbled roughly 7% to hover near the $82,000 mark, triggering a cascade of forced liquidations across major exchanges. Data from CoinGlass revealed a staggering $1.75 billion in total liquidations over the past 24 hours, with long positions accounting for a dominant $1.65 billion of that sum. The lopsided nature of the liquidations, affecting over 276,000 traders, underscored a market caught off-guard and scrambling for stability.
On the heatmap of crypto losses, Bitcoin was the clear outlier, with $826.63 million in liquidations tied to BTC alone. Ethereum followed with $428.48 million, while assets like XRP and Solana also recorded significant hits exceeding $70 million each.
Equity markets painted a more nuanced picture. The MSCI's broadest index of Asia-Pacific shares outside Japan edged down 0.2%, while U.S. stock futures pointed to a weaker open, with S&P 500 e-mini futures down 0.4% and Nasdaq e-mini futures off 0.5%. The cautious tone carried over from Wall Street, where major indices dipped Thursday following disappointing earnings from tech giant Microsoft, which stoked fears that massive AI investments may not yield immediate returns for investors.
The tech sector's divergence was stark. Microsoft shares plunged 10%, erasing over $350 billion in market value after its cloud growth failed to meet lofty expectations. In contrast, Meta Platforms surged 10% as its AI-driven ad tools bolstered its revenue forecast. Apple also provided a bright spot, projecting robust quarterly growth fueled by resilient iPhone demand and a recovery in its China business.
In Japan, the Nikkei 225 held steady as inflation data met the central bank's target. Currency markets saw the U.S. dollar firm after Trump's comments on the impending Fed nomination, which added a layer of uncertainty to the interest rate outlook.
Analyst & Investor Commentary:
"The crypto liquidation data tells a clear story of over-leveraged optimism meeting a macro reality check," said David Chen, a portfolio manager at Horizon Capital in Singapore. "Traders were positioned for one-way momentum, and Trump's dual announcements on the Fed and the budget were the catalyst for a painful unwind."
"This is classic risk-off behavior, but with a digital twist," noted Priya Sharma, a senior market strategist at FinLex Advisors. "While crypto absorbs the shock, traditional markets are selectively pricing in earnings fundamentals versus policy uncertainty. The Fed chair pick will be the next major pivot point."
"It's absolute carnage out there for the crypto bulls," exclaimed Marcus Reed, an independent trader based in Hong Kong. "This isn't just a healthy correction—it's a warning shot that these assets are still hypersensitive to political headlines from Washington. The leverage in the system is insane, and the 'longs' are getting slaughtered because of it."
"The focus shouldn't just be on crypto's pain," argued Eleanor Vance, an economics professor at the University of Melbourne. "The bigger story is the market's attempt to handicap a potential shift in U.S. monetary policy leadership amid ongoing fiscal brinksmanship. Today's volatility is a symptom of that profound uncertainty."
As the trading day progresses, market participants will be closely parsing any further details on the U.S. shutdown deal and awaiting the official announcement of the Fed chair nominee, which could set the tone for global risk assets in the weeks ahead.