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Crypto carnage signals bigger trouble ahead

A full-blown crypto meltdown is unfolding as markets spiral into risk-off mode, with virtually every coin getting torched—some plunging nearly 20%. This isn't just a crypto selloff; it's a liquidity scramble as traders shed speculative assets ahead of what could be a tidal wave of margin calls and stop losses across multiple assets.

The red flags are everywhere—the crypto wipeout is casting a long shadow over global equities, suggesting retail traders are offloading profitable positions before they get steamrolled in FX or stocks. The same panic dynamic is hitting gold markets, where safe-haven demand is being overridden by cash-raising urgency.

But the real inferno is in FX, where trade surplus currencies are being obliterated, standing directly in the line of fire. This goes beyond the balance of payments fallout—we're staring at a monetary policy divergence of epic proportions.

Global central banks may be forced to cut rates, but the Fed? It’s looking at a raging inflation beast that just got a fresh dose of adrenaline. If these tariffs stick, expect the inflation dragon to roar back to life, forcing the Fed to keep the screws tight while other central banks scramble to ease.

The result? Long-term U.S. Treasury yields spike higher, further supercharging the dollar wrecking ball, which is already smashing its way across markets. Right now, we’re seeing a safe-haven dollar bid, but this is bigger than that—it’s a fundamental repricing of inflation, growth, and policy risks.

Buckle up. This is just the opening act. But the real question is, assuming this dump is simply a cash-raising exercise, where can you buy the dip in BTC and Gold?

Author

Stephen Innes

Stephen Innes

SPI Asset Management

With more than 25 years of experience, Stephen has a deep-seated knowledge of G10 and Asian currency markets as well as precious metal and oil markets.

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