The crypto market’s close ties to traditional markets were laid bare on Friday as a sharp slide in metal prices jolted millions into leveraged bets on blockchain versions of gold, silver and copper.
Three-month copper futures on the London Metal Exchange (LME) fell nearly 4% from Thursday’s peak above $14,500 a barrel. ton, falling closer to $13,000 amid technical disruptions on the LME and a sharp shift in positioning by Chinese traders. The move marked a break from a relentless run fueled by Chinese demand, energy transition optimism and a weaker US dollar.
Gold and silver prices fell by 4% and 5.9% respectively.
That cut soon appeared in the crypto markets. Tokenized metal products tied to copper, gold and silver saw a normally steep increase in losses as their spot prices cooled.
Across exchanges, derivatives and spot-style products linked to metals logged about $120 million in combined liquidations over the past 24 hours. Silver-linked contracts led the pack to $32 million in losses, followed by gold and copper-linked futures. Prices of tokenized bullion like XAU and XAUT fell over 7%.
These liquidations reflect how crypto venues are increasingly being used as complementary rails to macro trades.
As the metals surged higher earlier this week, traders leaned into crypto-native contracts for speed, leverage and round-the-clock access. As prices tumbled, those same markets became a release valve for risk.
Dollar strength hurts
The broader decline in metals came as the US dollar strengthened on speculation that the Trump administration may be preparing to nominate Kevin Warsh as the next chairman of the Federal Reserve.
A stronger dollar tends to pressure commodities priced in dollars, and Friday’s move hit metals across the board. Gold fell sharply from record highs, while silver, crude oil and iron ore also moved lower.
Even with the setback, however, metals remain one of the year’s strongest themes so far. Copper remains on course for a strong weekly gain, having recently rallied on supply constraints and electrification demand, while gold continues to attract flows as investors shrug off political and fiscal uncertainty.
Crypto markets are increasingly along for the ride – not as a separate trade, but as a parallel venue where global macro bets now play out in real time.
