Crypto CARNAGE: $20B Vanishes as Bitcoin Plummets

Record Crash: On Oct. 10–11, 2025 the crypto market was rocked by one of its biggest-ever selloffs. Over $19–20 billion in leveraged bets were liquidated in 24 hours – a record wipeout ^[1] ^[2]. The rout was triggered by President Trump’s surprise announcement of 100% tariffs on Chinese imports, which sent investors scrambling for the exits ^[3] ^[4].
Major Losses: Bitcoin plunged roughly 10% from its recent high, briefly dipping below $105K (from about $125K) ^[5] ^[6]. By mid-crash, BTC hit lows near $102K, one of its steepest drops ever ^[7] ^[8]. Ethereum, the second-largest crypto, fell even harder – off about 15–20%, hitting the mid $3,000 range ^[9] ^[10]. Many altcoins plunged 30–40% or more (e.g. XRP -31%, Doge -39%) ^[11] ^[12].
Exchange Chaos: The surge in trading pressure caused outages and failures on major exchanges. Traders reported halted orders and frozen accounts as volumes spiked ^[13]. Binance – the world’s largest crypto exchange – acknowledged service disruptions and has pledged to compensate users whose losses were due solely to its systems failing during the crash ^[14]. By contrast, decentralized platforms handled the stress smoothly: Uniswap saw record trading volume (~$10B/day) and lending protocols like Aave managed unprecedented liquidations without downtime ^[15].
Market Reaction: As of Oct. 12, Bitcoin had partially recovered to roughly $111–112K, down from its Monday peak of ~$125K ^[16] ^[17]. The crypto Fear & Greed Index illustrates the panic: it plunged from 64 (“Greed”) to just 27 (“Fear”) in 24 hours after the tariff news ^[18]. In interviews, experts described the market as “essentially stabilized” after the initial shock ^[19]. Joshua Duckett of crypto forensics firm CyberForensic noted that the worst of the selling had passed by Sunday: “Right now, we’re kind of in a rebound-to-stable position. Tomorrow is a new day” ^[20].
Expert Forecasts: Many long-term bulls remain optimistic. Some analysts still forecast Bitcoin could resume its uptrend, hitting $130K–$160K by late 2025 or even ~$200K in 2026 ^[21] ^[22]. In fact, Bernstein analysts reaffirmed a $200,000 target by early 2026, citing surging institutional adoption and ETF inflows ^[23]. Noted economist Timothy Peterson points out that historically October is bullish, often seeing ~20% gains, so he predicts BTC could climb ~21% in the coming week if patterns hold ^[24] ^[25]. Crypto strategist Samson Mow quipped that “there are still 21 days left in ‘Uptober’,” arguing the recent dip may prove only a minor setback ^[26].
Caution & Context: Others urge restraint. “All bets are off if U.S.–China tensions continue to worsen,” warns CoinDesk’s market team ^[27]. Crypto investor Ruslan Lienkha of YouHodler noted the risks of trading on exuberance alone: “The lack of new catalysts is one of the key reasons for crypto’s current stagnation” ^[28]. Billionaire Ray Dalio has also reminded investors to hedge: he recommends holding ~15% of a portfolio in gold or other stores of value during turbulent times ^[29].

Crash Overview

The crypto meltdown unfolded late on Oct. 10, 2025. In a posting on Truth Social, President Trump threatened a “massive increase” in tariffs on Chinese goods and new controls on technology exports ^[30] ^[31]. The announcement reignited trade-war fears, spooking all risk assets. U.S. stock markets fell (Nasdaq -3.6%, S&P 500 -2.7% on Oct. 10) ^[32], but crypto was hit even worse. Traders exploiting high leverage were caught off guard: Bitcoin collapsed from ~$122K to below $119K within minutes, as panic-selling cascaded through auto-liquidations ^[33] ^[34].

Joshua Duckett of crypto forensics firm CryptoForensic told Fox Business that a wave of forced liquidations in leveraged positions drove the crash. “Most people don’t invest more than they can lose… but in [crypto] leveraged trading, it’s in the billions,” he explained ^[35]. Duckett estimated that the crash wiped out traders’ profits ranging from thousands to millions, with total liquidations “extending into the billions” ^[36]. By Saturday Oct. 11, the one-day carnage was clear: per CoinGlass data, roughly $19.1 billion of long/short bets across the crypto market had been wiped out – by far the largest single-day liquidation event on record ^[37] ^[38]. In one hour alone, over $7 billion of positions blew up ^[39].

Price Plunge and Liquidations

The price action was brutal. Bitcoin’s all-time high of $125,000 (reached just days earlier) evaporated to $104–105K by Friday afternoon ^[40] ^[41]. Even as it briefly rebounded to ~$112K on Saturday ^[42], this amounted to an ~10% intraday loss. Ethereum fared worse: its price plunged about 21% at the lows, dropping from ~$4,390 to near $3,460 ^[43]. Other majors like Solana and XRP fell 15–30% in the crash ^[44] ^[45]. CryptoNews reported that “BTC flash-crashed to lows of $104,500 — diving to $102,000 on some exchanges.” Similarly, ETH and many altcoins saw unprecedented drops ^[46] ^[47].

These swings vastly outpaced traditional markets. By comparison, at the same time Bitcoin was tumbling, 10-year U.S. Treasury yields actually fell (as investors fled to safety) ^[48] – a headwind for risk assets. Crypto’s 24/7 trading meant the cascade of sell orders had no respite. As Duckett noted, “the crypto market reacted in a more extreme way than the stock market because it’s 24/7,” so any negative news hits immediately, with no weekend or closing time to halt the decline ^[49].

Exchange Failures and DeFi Resilience

The torrent of orders overwhelmed many centralized exchanges. Traders widely complained of failed or delayed orders, frozen accounts, and halts during peak volatility ^[50]. Screenshots on Crypto Twitter showed some altcoin/USDT pairs momentarily plunging >90% as errant trades executed without liquidity ^[51]. Binance’s customer service co-founder, Yi He, publicly acknowledged the disruptions and announced the exchange would review and compensate users who lost funds due to these platform issues ^[52]. (She clarified that compensation would not cover market losses from volatility.)

In stark contrast, decentralized platforms recorded no outages. Uniswap logged over $10 billion in daily volume – a new record – without a hitch ^[53]. Aave processed ~$180M in liquidations in one hour, which its founder hailed as “the largest stress test” of that protocol ^[54]. As Michael Bentley of lending protocol Euler noted, “No emergency circuit breakers. No regulatory interventions. Just free markets and code.” The crisis, in fact, highlighted the strength of DeFi infrastructure under stress ^[55].

Initial Stabilization

By Sunday, panic was easing. Bitcoin rebounded to around $112,000 ^[56], erasing much of the flash crash in crypto’s intraday charts. As Fox Business observed, “it seems to have essentially stabilized” ^[57]. The brutal selling “shook out weak hands,” some analysts said, meaning that at lower levels, buying demand began to surface again. Crypto strategist Scott Melker noted an orderly recovery on Sunday as markets reopened, and the Fear & Greed Index – after briefly hitting “Extreme Fear” – showed sentiment moderating.

Institutional moves helped buoy crypto too. For example, 21Shares and Grayscale announced new client inflows to their bitcoin ETFs on Monday, and even Japan’s Mega banks were reportedly planning additional crypto services ^[58]. On the stock side, crypto-related equities mirrored the retreat: Coinbase (COIN) fell about 8% on Oct. 10 (to ~$357) ^[59] ^[60], and mining companies and blockchain tech stocks also slid. But by the end of the weekend, many saw the worst as over – Fox’s Duckett summarized that for now the market was “in a rebound-to-stable position” ^[61].

Forecast and Analysis

With the immediate panic fading, analysts are debating what comes next. On the optimistic side, many point out that historically October has been a strong month for Bitcoin. Economist Timothy Peterson noted that since 2013 October’s average BTC gain is ~20%, second only to November ^[62]. In past Octobers, week-long drops like Friday’s have often been followed by sharp rebounds ^[63] ^[64]. If history repeats, a ~20% bounce would take Bitcoin back near $125K in a week or two ^[65].

Technically, bulls say key support was in place. Bitcoin has held above roughly $105K–110K, and must now reclaim resistance around $120K–$124K to confirm a bullish resumption ^[66]. Ethereum similarly needs to break back above ~$4,200–4,500. So far, the “fear” has not hit panic-bear levels – the Fear & Greed Index sits in neutral territory, suggesting traders see this as a healthy pullback rather than the end of the bull run ^[67]. In fact, some chartists view the dip as a potential “buy the dip” opportunity, shaking out speculation (leverage) to build a cleaner base for a next rally ^[68].

Bitcoin’s long-term fundamentals remain supportive. Spot Bitcoin ETFs have drawn over $150 billion AUM, with BlackRock’s alone near $84B ^[69]. Central banks and pension funds continue to diversify into digital gold, and regulation is easing (with expected new crypto laws and further ETF approvals on the horizon). Bernstein research forecasts a “long and exhausting” bull market, seeing BTC hitting $200,000 by early 2026 as institutional flows intensify ^[70]. Standard Chartered has even argued Bitcoin will “soon reach $135,000” if U.S. fiscal gridlock keeps yields and credit risk high ^[71].

Of course, risks abound. If the trade war escalates further – for example, China retaliates with its own tariffs or export bans – markets could sell off again. CoinDesk analysts warned that “all bets are off” if U.S.–China tensions worsen ^[72]. Other macro threats include a potential U.S. recession, renewed inflation, or central banks not easing as expected. Higher-for-longer interest rates would dampen speculative asset flows and could pressure crypto prices. Internally, exchanges may tighten margin rules after this crisis, reducing leverage (which could stabilize prices but also squeeze liquidity).

Given the volatility, many experts repeat the timeless advice: only invest what you can afford to lose. Fox Business reminded readers that this principle applies especially in crypto ^[73]. As veteran investor Robert Kiyosaki has cautioned, bubbles “are about to start busting,” with some seeing up to 50% pullbacks ahead for Bitcoin before it resumes its rise ^[74]. Even crypto bulls like Samson Mow and Michael van de Poppe have acknowledged the sharpness of this crash, calling it the “bottom of the current cycle” and urging patience.

Looking Ahead

For now, most analysts expect crypto markets to consolidate in the near term. If no new shocks materialize, the focus turns to the upcoming macro calendar. The U.S. Federal Reserve’s October meeting (Oct. 31–Nov. 1) will be watched for any change in monetary policy; a dovish pivot could give crypto and equities a lift. Other potential catalysts include legislative moves on crypto regulation, big tech or financial firms announcing new crypto initiatives, and continued ETF and institutional inflows.

In summary, the October 2025 crash was a high-water mark for crypto volatility – an extreme event born of geopolitical brinkmanship and excessive leverage. It erased billions overnight, tested exchange infrastructure, and reminded the market that “Bitcoin is digital gold only until the moment panic strikes,” as one analyst put it. But if history is any guide, surges often follow crashes. Many experts believe Bitcoin will ultimately regain its uptrend and challenge fresh highs into 2026 ^[75] ^[76]. As always, investors will be watching closely: has crypto cleared out its froth, or are more shocks ahead? Only time will tell.

Sources: Recent news and analysis from Fox Business ^[77], Bloomberg ^[78], Reuters ^[79], CCN ^[80], CryptoNews ^[81], TechSpace2.0 (TS2) ^[82] ^[83], DLNews ^[84], CryptoNews analyses ^[85], and others cited above.