The US stock market plummeted by 4 trillion and the cryptocurrency market "collectively suffered a heavy loss". Where will the market go in the future?

On March 10, 2025, the global financial market suffered a severe shock. The US stock market was panic-sold due to Trump's tariff policy, and the market value evaporated by $4 trillion, and the recession was looming. At the same time, the cryptocurrency market was not spared, and mainstream currencies such as Bitcoin and Ethereum plummeted across the board.

Cryptocurrency market "collectively plunged": panic spreads

As of 9:00 a.m. on March 11, Beijing time, the cryptocurrency market in the past 12 hours was shrouded in a haze, which can be described as "collective slump" and "full-line plunge". The market panic has significantly intensified. According to Coinglass data, the number of people who have been liquidated in the past 24 hours has exceeded 210,000, and the amount of liquidation has reached 924 million US dollars. The largest single liquidation order is worth more than 32 million US dollars. The market has experienced a drastic deleveraging process.

Specifically, the price of Bitcoin continued to fall, once falling below the key mark of $77,000. Bitcoin fell by more than 4%-5% in the past 12 hours. Ethereum's decline was even more severe. Coinbase data showed that it plummeted by more than 13% in the past 24 hours. Other mainstream coins and altcoins such as ADA, SOL, and DOGE also suffered heavy losses, and some coins even fell by more than 10%-12%.

US stock market "earthquake": Trump's tariff policy triggers market panic

The U.S. stock market suffered its worst single-day plunge since 2025, with a market value of $4 trillion evaporating in an instant, which can be called a "big earthquake". The S&P 500 index fell 2.7% in a single day, setting a record for the biggest drop of the year; the Nasdaq index plummeted 4%, setting a record for the biggest single-day drop since September 2022, and the market value of the seven technology giants evaporated by more than $750 billion. Tesla's stock price collapsed by more than 15%, setting a record for the worst single-day performance since 2020.

The "trigger point" of market panic is the Trump administration's tariff policy. Tariff measures against major trading partners such as Canada, Mexico and China have triggered deep concerns in the market about the escalation of the trade war and a global economic recession. Ayako Yoshioka, senior investment strategist at Wealth Enhancement, pointed out sharply that market sentiment has changed dramatically and strategies that once worked are no longer applicable.

Multiple factors superimposed: analyzing the underlying reasons for the market crash

The sharp drop in both the stock and cryptocurrency markets is the result of the superposition and resonance of the following risk factors:

1. Trump’s tariff policy and the shadow of the trade war: The Trump administration’s tariff policy is the most direct trigger for this market panic. The tariff policy not only directly impacts corporate profits, but also exacerbates global trade tensions and triggers investors’ concerns about economic recession.

2. Rising expectations of economic recession: The negative impact of tariff policies, coupled with the risk of a global economic downturn, has significantly increased market concerns about economic recession. U.S. Treasury yields have fallen sharply, and the Cboe Volatility Index has soared to its highest level since August, both of which reflect investors' extreme anxiety.

3. Overvaluation of technology stocks and profit-taking: In the past two years, technology stocks and large-cap stocks have been the main engine of market growth, accumulating huge gains and valuations at historical highs. The market crash is also due to the correction of technology stock valuations and concentrated selling of profit-taking.

4. The cryptocurrency market’s own need for a correction: The cryptocurrency market has also experienced a round of rapid increases recently, with the price of Bitcoin once approaching its historical high. The market itself has a need for technical adjustments and profit-taking, and external risk events have accelerated the correction process.

Market outlook: Short-term volatility intensifies, long-term prospects remain unclear

Looking ahead, global financial markets, including the cryptocurrency market, may continue to experience sharp fluctuations in the short term. Investors need to be alert to the following risks:

1. Market panic may continue: The direction of the Trump administration’s tariff policy is still unclear, the risk of a trade war may continue to ferment, and market panic will be difficult to dissipate quickly in the short term.

2. US stocks may face further downside risks: EvercoreISI analysts warned that increasing concerns about stagflation, tariff policies and economic uncertainty may cause the S&P 500 to fall further, and may even fall to a pessimistic scenario of 5,200 points. The Nasdaq index has entered a technical correction area, and the risk of a bear market is approaching.

3. The cryptocurrency market may be under pressure: Against the backdrop of rising global risk aversion, the cryptocurrency market will find it difficult to remain immune and may continue to be dragged down by downward pressure from external markets, and may continue to fluctuate and adjust in the short term.

4. Be wary of "black swan" events: The current global economic and geopolitical environment is complex, and sudden "black swan" events may still occur in the future, further exacerbating market volatility.

In the long run, there is still great uncertainty about the future direction of the cryptocurrency market and the traditional financial market. On the one hand, technological innovation, policy shifts and application expansion will still bring long-term growth potential to the cryptocurrency market; on the other hand, factors such as macroeconomic downside risks and the US government's economic policies will also restrict its long-term development.

Non-investment advice:

In the face of the current turbulent market environment, investors should remain cautiously optimistic and adopt the following strategies:

• Control positions and reduce leverage: During periods of severe market fluctuations, positions should be reduced, excessive leverage should be avoided, and risks should be strictly controlled.

• Focus on safe-haven assets: When risk aversion in the market rises, you can appropriately allocate safe-haven assets such as gold and bonds to hedge risks.

• Select high-quality targets: Whether it is stocks or cryptocurrencies, we should adhere to the concept of value investment and select high-quality targets with good fundamentals and long-term growth potential.

• Pay close attention to market trends: Pay close attention to the global macroeconomic situation, policy changes and market sentiment, and adjust investment strategies in a timely manner.

• Do a good job in risk management: Both the cryptocurrency market and the stock market are high-risk. Investors must fully understand the risks, do a good job in risk management, and avoid blindly chasing highs and selling lows.

The global market crash on March 10, 2025 is the result of the resonance of multiple risk factors, indicating that market volatility may increase in the future. Investors should remain vigilant, respond prudently, and seize long-term investment opportunities.