The Most Brutal Chinese New Year Crypto News You Might Have Missed

US Trade War Triggers Epic Crypto Liquidation, Bitcoin Plunges Below $92,000

On February 2, the US government announced a 25% tariff on imports from Canada and Mexico. The same day, US President Trump signed a tariff order imposing an additional 25% tariff on imports from Canada and Mexico, and a 10% tariff on energy resources from Canada. The tariff is set to take effect on the 4th. The global risk market reacted swiftly to this, with the cryptocurrency market hit first. On that day, the price of Bitcoin plummeted rapidly from around $105,000 to below $92,000, with a more than 7% drop in 24 hours. Ethereum, BNB, and other mainstream cryptocurrencies also experienced synchronized dives, with drops of over 10%.

This plunge directly led to a record-high scale of liquidation in the crypto market. According to Coinglass data, on February 3, the total amount of liquidated positions in the past 24 hours reached a staggering $2.028 billion, with long positions liquidated at $1.766 billion and short positions at $270 million, resulting in over 700,000 people being liquidated. The largest single liquidation occurred in the ETHUSDT trading pair on the Binance platform, with an amount of $25.635 million. Ben Zhou, CEO of Bybit, stated on social media that the actual liquidation amount could far exceed $2 billion, estimating it to be between $8 billion and $10 billion.

Market panic spread, with the funding rates on mainstream exchanges turning negative. The funding rate for BTC perpetual contracts on the Binance platform dropped to -0.0007%, indicating a strong bearish sentiment in the market. CoinDesk analyst James Van Straten pointed out that a negative funding rate is usually a signal of a "local bottom," but the uncertainty brought about by the trade war continues to weigh on the market.

On February 3, Mexican President Obrador stated that the US tariffs on Mexico would be postponed for one month. On February 4, Canadian Prime Minister Trudeau also announced that the US would suspend additional tariffs on Canada for at least 30 days. With the temporary easing of trade war tensions, the crypto market began to rebound.

The recovery of market confidence was further boosted by another piece of positive news. On February 3, Trump signed an executive order calling for the establishment of a sovereign wealth fund. The market speculated that this fund could become a channel for the government to purchase and hold cryptocurrencies, further driving the rebound of assets such as Bitcoin.

Despite a short-term market recovery, the global economic uncertainty triggered by the trade war continues to pose long-term pressure on the crypto space. Caroline Bowler, CEO of BTC Markets, stated: "Trump's tariff policy is affecting the entire market, with concerns about the trade war and recession-induced by stagnation spreading to the altcoin and Bitcoin markets."

DeepSeek Emerges, Crypto AI Market Cap Plummets

On January 27, the domestic AI large model DeepSeek surpassed ChatGPT in download volume, claiming the top spot on the U.S. APP Store and garnering global attention and media coverage from the technology, investment, and media industries. Due to DeepSeek's performance comparable to that of large-scale cutting-edge models like OpenAI but with a training cost of less than $6 million, the AI industry's longstanding belief in "great power achieves miracles" has been shaken, leading the financial sector to view it as a black swan event triggering a financial crisis.

On January 29, several U.S. officials responded to DeepSeek's impact on the U.S., stating that DeepSeek is a "theft" and launching a national security investigation into its effects. Just the day before, U.S. President Trump also described DeepSeek as a very positive technological achievement. On February 2, Cathie Wood, CEO of asset management company ARK Invest, known as "WoodSister," stated in an interview that DeepSeek has proven that success in the AI field does not require a large sum of money and has accelerated cost reduction.

Influenced by DeepSeek, NVIDIA saw a 5.3% drop in its stock price that day, the Nasdaq fell over 400 points, and nearly $1 trillion was wiped off the U.S. stock market value. Likewise, Bitcoin and cryptocurrencies as risk assets were also impacted, with the AI sector experiencing the most significant market cap decline. According to Coingecko data, the current total market cap of the crypto AI sector is $29.2 billion, down nearly 50% from its peak total market cap of $54.4 billion.

Anonymous Letter Accuses Binance of Listing Process Irregularities, Two Space Events Spark Community Discussions

On February 2, an anonymous user published a lengthy letter accusing Binance of irregularities and lack of transparency in its listing process, prompting widespread community attention. In response to this, Binance Labs held a community Space event on the same day, where Binance co-founder He Yi and several relevant individuals addressed the concerns raised in the anonymous letter one by one.

In the Space event, He Yi clarified that she no longer holds a position on the YZi Labs investment committee, which is mainly chaired by CZ and Ella. She emphasized that she does not influence YZi Labs' investment decisions.

Regarding the common occurrence of new coins listed on Binance experiencing a "peak at the opening" phenomenon, He Yi admitted that this issue is determined by the current market structure and Binance's volume. She stated that Binance has been internally researching solutions, including coin voting and Dutch auction mechanisms, but has not yet found a perfect solution due to issues related to target selection and regulatory balance. He Yi advised investors to thoroughly research new listed coins to avoid blindly chasing highs. She also revealed that Binance plans to adjust its listing rules and will urge listed project teams to update their project information promptly, taking risk alert measures for projects that do not actively update.

Another key figure in the anonymous letter, Primitive Ventures co-founder Dovey Wan, has also faced community scrutiny due to her relationship with Hooked Protocol founder Jason. On February 4, Dovey Wan responded in a community-organized Space, stating that she and Jason were previously in a romantic relationship, but there was no misconduct or insider trading during the process of Hooked Protocol's launch on Binance Launchpad. She mentioned that her initial investment valuation in Hooked Protocol was $30 million, with the same unlocking period as other investors, and she was not pre-informed about the project's launch on Binance Launchpad.

Furthermore, Dovey Wan clarified her relationship with He Yi, stating that the two had a "distant relationship" and did not have a "bestie" relationship. She emphasized that she played more of an investor role in the market, while He Yi had a founder role, with limited overlap between the two.

El Salvador Rescinds Bitcoin Legal Tender Status

On January 30, according to Cointelegraph, the Salvadoran Congress swiftly passed legislation amending its Bitcoin law to comply with the International Monetary Fund (IMF) agreement. The ruling party's legislator Elisa Rosales stated that the amendment aims to ensure Bitcoin's "permanence as legal tender" while promoting its "practical use."

On February 2, the Salvadoran Congress (controlled by the ruling party) quietly passed an amendment to the "Bitcoin Law," revoking Bitcoin's official currency status and making its use entirely optional based on individual choice. This reform was made under pressure from the International Monetary Fund (IMF) over the past two years. As a condition for approving a $1.4 billion loan, the IMF demanded that the Salvadoran government "reduce Bitcoin's risk."

El Salvador was the first country in the world to adopt Bitcoin as legal tender and has now become the first country to abandon this policy. Bitcoin is no longer a "currency" in El Salvador; its use is entirely voluntary. Members of Congress modified six articles of the "Bitcoin Law" and repealed three articles (the law had a total of 16 articles since its implementation). From now on:

· Bitcoin is no longer considered "currency," and businesses are no longer required to accept Bitcoin payments.

· Its use is voluntary and no longer has legal tender status.

· The government will no longer accept Bitcoin for taxes.

Although the ruling party reluctantly accepted this modification, they did not publicize it widely. Despite President Bukele's high activity on social media, he has not yet made any comments on this issue. However, on-chain data shows that El Salvador is still accumulating Bitcoin. On February 1, El Salvador acquired an additional 5 BTC in the past 24 hours, bringing its total holdings to 6,055.18 BTC, valued at $618,113,096. On January 20, El Salvador acquired 11 BTC ($1,113,508). Furthermore, on January 14, according to Bitcoin Magazine, El Salvador's Senior Bitcoin Advisor Max Keiser revealed that President Bukele is preparing to install a Bitcoin node in every household in the country.

After VVV Fast Track, Is Coinbase Also Taking a Big Cut?

On January 28, Coinbase listed the Venice Token (VVV), a Base chain AI concept token, on its platform. Venice Token is an AI project on the Base network based on DeepSeek and was launched on January 27.

This token was listed on the first day of the New Year holiday and saw a rapid increase in market value within 24 hours, thanks to Coinbase's listing and Base's promotional support. At the same time, it also airdropped to active users on the Base network. Amidst the panic selling caused by DeepSeek in the market, the DeepSeek-based VVV undoubtedly provided the market with a good hype target. However, VVV's price performance after being listed on Coinbase has been less than satisfactory.

Crypto KOL @chadderbiz analyzed that Aerodrome contributor Ace (@Ace_da_Book) bought $50,000 worth of the token just 6 minutes after VVV was issued. Half an hour later, the relevant parties made the token announcement. Through this transaction, Ace made a profit of $1 million. Ironically, after selling the token, Ace even tweeted, "Banger launch, congrats team!" to congratulate the VVV team.

Other Industry News Worth Noting

Robinhood Launches Futures Trading, Including Bitcoin, Forex, and Stocks

On January 29, according to market reports, Robinhood has started rolling out futures trading, including Bitcoin (BTC), Forex (FX), and stocks.

Uniswap v4 Officially Launched

On January 31, Uniswap v4 was launched, becoming the latest version of the Uniswap protocol. After contributions from hundreds of community members, nine independent audits, the largest security competition in history, and a $15.5 million bug bounty, Uniswap v4 is now live on multiple chains such as Ethereum, Polygon, and Arbitrum. This update makes the protocol a highly customizable developer platform where developers can define custom logic for pools, swaps, fees, and other functionalities through 'hooks' plugins.

SBF's Parents Reportedly in Talks with Trump Insiders for Pardon

On January 31, according to Bloomberg, sources familiar with the matter revealed that the parents of FTX founder Sam Bankman-Fried, Stanford Law School professor Joseph Bankman and Barbara Fried, have recently met with lawyers and other Trump insiders in an attempt to seek a pardon for SBF from Trump. It is currently unclear if contact has been made with the White House. SBF was previously sentenced to 25 years in prison for fraud in the FTX bankruptcy case.

On February 4, FTX creditor representative Sunil announced that FTX's repayment has been scheduled to begin on February 18, 2025, at 10:00 AM Eastern Time, starting with creditors claiming amounts below 50,000 USDT.

Monad Post Implies Testnet May Launch This Month

On February 4, the parallel EVM network Monad posted hinting that the testnet may launch within February 2025.

Berachain Mainnet to Launch on February 6, 2025

On February 4, the Berachain Foundation officially announced that the Berachain mainnet will launch on February 6, 2025. The Berachain token generation event (TGE) will take place concurrently with the mainnet launch, and the tokenomics and Checker (or Airdrop Checker) will go live tomorrow.