Something strange happened in crypto-land this weekend. On Friday afternoon at around 4:30 pm, a large “whale” — a player big enough to noticeably move asset prices — began placing shorts on crypto. Short orders occur when traders borrow an asset, which they immediately sell, before buying it back at (they hope) a reduced price, repaying the loan and then pocketing the difference.
Minutes later, President Donald Trump announced a 100% tariff on Chinese imports. The price of Bitcoin then plunged by 4%, whereupon most of the short positions were closed. Whoever was doing the trading walked away with a profit of $192 million. Nice work if you can get it.
Of course, everyone else in the crypto space lost around $200 billion among them. The immediate suspicion was that someone in the administration knew what was coming and decided to make a fast buck.
It’s not the first time strange movements have taken place in markets just before a major Trump announcement that moved asset prices. In April, the Attorney General Pam Bondi sold millions of dollars worth of stock in Trump Media just hours before the President’s “Liberation Day” tariff announcement sent its price tumbling. A week later, Trump’s tweet urging that it was a “great time to buy,” just before his U-turn on tariffs, raised further suspicion. ProPublica has documented several similar cases where market swings coincided suspiciously with presidential statements.
Trump denies any insider dealing while acknowledging, albeit doubting, that administration insiders could be profiting from privileged information. And it would be very difficult to prove that anyone broke the law. In any case, there’s more to the story than an engineered crash: cryptocurrency prices were already sliding before Trump’s announcement, which merely accelerated the fall — if only briefly.
The crypto market is highly leveraged, with traders taking on debt to buy digital assets on the assumption that rising prices will make repayment easy. But when prices turn, some owners are forced to sell quickly to meet their debt obligations. That appears to have exacerbated Friday’s plunge.
Hellbound and Down 