The downturn in metals has become a significant theme for the year, while Bitcoin trades independently, highlighting its increasing role as a standalone risk asset.
The crypto market's close ties to traditional markets were exposed on Friday as a sharp decline in metal prices led to millions being wiped out in leveraged bets on blockchain versions of gold, silver, and copper.
Three-month copper futures on the London Metal Exchange fell nearly four percent from Thursday’s peak above fourteen thousand five hundred dollars a ton, settling closer to thirteen thousand dollars amid technical issues at the LME and a significant shift in positioning by Chinese traders. This pullback followed relentless gains driven by Chinese demand, energy transition optimism, and a weaker U.S. dollar.
Gold and silver prices declined by four percent and five point nine percent, respectively.
This retraction quickly reflected in crypto markets. Tokenized metal products linked to copper, gold, and silver experienced unusually high losses as their spot prices cooled.
Across exchanges, derivatives and spot-style products linked to metals logged roughly one hundred twenty million dollars in combined liquidations over the past twenty-four hours. Silver-linked contracts led with thirty-two million dollars in losses, followed by gold and copper-linked futures. Prices for tokenized bullion products like XAU and XAUT dropped over seven percent.
These liquidations underscore how crypto venues are increasingly being utilized as complementary channels for macro trades.
When metals surged earlier this week, traders gravitated towards crypto-native contracts for their speed, leverage, and round-the-clock accessibility. As prices reversed, these markets served as a release valve for risk.
The broader pullback in metals coincided with a strengthening U.S. dollar, fueled by speculation that the Trump administration may nominate Kevin Warsh as the next Federal Reserve chair.
A stronger dollar often pressures commodities priced in dollars, and Friday's shift impacted metals across the board. Gold saw a sharp decline from record highs, while silver, crude oil, and iron ore followed suit.
Despite the setback, metals continue to be one of the strongest themes of the year thus far. Copper is still on track for a strong weekly gain, driven by supply constraints and electrification demand, while gold continues attracting flows as investors hedge against political and fiscal uncertainty.
Crypto markets are increasingly part of this narrative—not as a separate trade but as a parallel venue where global macro bets unfold in real time.