TL;DR
- The Ethereum market dropped 27% on Monday, hitting $2,135, due to Donald Trump’s trade tariff announcements and adjustments in leveraged positions.
- On Tuesday, the 2x ETH ETF saw a record inflow of $246.5 million, and other ETH products received $308 million in inflows.
- The intervention of World Liberty Financial and Eric Trump, who suggested buying ETH and acquired $55 million, also contributed to ETH’s partial recovery.
The Ethereum market has experienced significant volatility in recent days, triggered by recent trade tariff announcements from Donald Trump.
On Monday, Ethereum (ETH) dropped 27%, reaching $2,135, its largest intraday decline since May 2021. This plunge, caused by adjustments in leveraged positions, also impacted futures markets and several exchange-traded funds (ETFs) linked to ETH, including the 2x ETH ETF.
Records in ETH Products
However, on Tuesday, investors showed a clear willingness to “buy the dip.” The 2x ETH ETF, which uses futures contracts to double ETH’s daily performance, saw a record inflow of $246.5 million, the largest single-day intake since its launch. This reaction was not limited to this fund, as other Ethereum products, such as spot ETH ETFs in the United States, saw net inflows of $308 million, the third-largest fund flow since their inception.
The drop in Ethereum also caused an increase in liquidations within the perpetual futures market, with over $600 million in positions being liquidated. However, ETH’s rapid recovery was driven by the delay in implementing tariffs on Mexico and Canada, which eased market tensions.
Eric Trump Suggested Buying Ethereum
In addition to the price recovery, a relevant factor was the intervention of World Liberty Financial, a decentralized project linked to the Trump family. Eric Trump, the president’s son, suggested in a post that it was a good time to invest in ETH. Although he later edited his post, he also made a purchase worth $55 million.
Despite the sharp initial drop, Ethereum partially recovered in the following days, trading at $2,733, reflecting a 2.2% drop in the last 24 hours.
