- Flash Crash Triggered: On Oct. 10, 2025 President Trump unexpectedly announced 100% tariffs on all Chinese imports. Cryptocurrency markets “plunged on Oct. 10–11” as panic selling set in [1]. Bitcoin fell roughly 12% (from ~$122K to ~$105K), and Ether slid about 12%, as leveraged long positions were liquidated [2] [3].
- Massive Liquidations: Nearly $19–20 billion of crypto leverage was wiped out in 24 hours. CoinGlass data (cited by analysts) showed liquidation of ~$19.1B affecting over 1.6 million traders [4] [5]. Crypto analysts called it “the largest wipeout in a 24-hour period in the market’s history” [6] – dwarfing even the 2020 Covid crash and FTX’s 2022 collapse.
- Altcoin Apocalypse: Many smaller tokens saw even steeper losses. XRP suffered a flash crash of ~31%, BNB fell ~20% and Dogecoin crashed ~39% in minutes [7]. Some illiquid tokens briefly collapsed to near zero. Even top crypto ETF inflows and “Uptober” rally momentum couldn’t stop the rout.
- Crazy Windfall: Two traders on the Hyperliquid exchange placed massive short bets just before the tariff tweet, netting about $160 million in profit [8]. The timing (one bet was made a minute before Trump’s announcement) triggered rumors of insider tips – though sources note China’s earlier rare-earth export curbs likely prompted both the trades and Trump’s tweet [9].
- Global Shockwaves: The crypto crash coincided with a stock market rout. U.S. indices plunged – the Nasdaq fell ~3.6% and the S&P 500 ~2.7% on the week – erasing about $2 trillion in equity value [10]. Gold and silver (traditional safe havens) spiked to all-time highs, while oil and riskier tech shares collapsed. One analyst observed, “the crypto market reacted in a more extreme way than the stock market because it’s 24/7” [11].
- Hedging & Stabilization: Traders piled into protective trades. Heavy buying of bitcoin and ether put options suggested investors were bracing for more declines [12]. Derive.xyz’s Sean Dawson noted, “volatility just jump[ed] across the board” ahead of the crash [13]. By Monday, Trump had softened his tone on China, calming markets slightly. Crypto was “in a rebound-to-stable position,” said CoinDesk analyst Joshua Duckett, predicting “Tomorrow is a new day” [14].
Tariff Bombshell Sends Crypto into Tailspin
On Friday evening, Oct. 10, President Trump posted on Truth Social that he would impose a 100% tariff on all Chinese imports starting Nov. 1. The tweet blindsided markets. Within minutes, a “risk-off” stampede hit global assets – and crypto fell hardest. Bitcoin plunged from about $122,000 to ~$114,000 in hours [15], ultimately bottoming near $104,782 (a 14% plunge) by Oct. 11 [16]. Ether fell over 12%, dipping under $3,500 [17]. Smaller “altcoins” got crushed as leveraged traders were liquidated en masse. The Wall Street Journal reported this surprise tariff tweet “triggered a cryptocurrency selloff that wiped out more than $19 billion in leveraged positions” [18]. In Coinbase and other markets, prices “fell sharply in late morning trading” as panic took hold [19].
Historic Liquidations and Lightning Losses
Analysts agree this was crypto’s biggest one-day wipeout ever. Reuters noted it was “nine times larger” than the Feb 2025 crash and dwarfed even the 2020 COVID plunge [20]. CoinGlass data showed roughly $19.1 billion liquidated in 24 hours [21], forcing over 1.6 million traders out of positions [22]. One exchange’s largest single liquidation was a $203 million bet on Ether [23]. Crypto trading volumes and margin calls overwhelmed systems – Binance and others even hit technical limits and slowed withdrawals. As Leveraged shorts triggered stop-loss cascades, market makers lost liquidity for smaller tokens. A Bitget analysis explains that when Trump’s tweet hit, institutions pulled funds out of minor coins (“Tier 2” assets) to protect core holdings [24], leaving many altcoins without buyers and causing extreme price swings.
Bitcoin, Ethereum and Altcoins Hit Hard
Bitcoin and Ether led the sell-off but altcoins bled even more. For example, ts2.tech reports XRP momentarily flash-crashed ~31%, Binance Coin (BNB) fell ~20%, and Dogecoin plummeted ~39% [25]. Other alt tokens plunged 50–80% intraday. Many crypto-linked equities dropped too – Coinbase stock tumbled ~5–8% on the day. By early Monday (Oct. 13), Bitcoin was near $115,000 and Ether around $4,250, reflecting a partial rebound as fears eased. But the damage was done: analyses noted the rout “exposed the extreme leverage” that had fueled crypto’s months-long rally [26].
Two Big Winners and Insider Theories
Amid the chaos, two traders became overnight millionaires. On Hyperliquid (a decentralized futures platform), two accounts placed huge short bets on BTC and ETH just minutes before Trump’s tweet. By Friday night, they closed those positions for a combined ~$160 million profit [27]. The timing raised eyebrows – some speculated they got a heads-up. The WSJ reports that the last trade was executed one minute before the tariff announcement [28]. However, investigators note these trades occurred right after China announced rare-earth export controls – a move that actually prompted Trump’s response [29]. No evidence of illicit tip-offs has emerged, but the episode highlighted how everyone from whales to average traders was braced for volatility. Even tweets about key support levels (like Bitcoin’s $106K level) proliferated on crypto forums, as technical analysts scrambled to find the bottom [30].
Global Markets in Turmoil
The crypto crash came in tandem with a broader market meltdown. In the U.S., the S&P 500 and Nasdaq saw their worst single-day drops in months [31]. Nearly $2 trillion of stock market value vanished within hours [32]. European and Asian bourses also sank on news of new trade barriers and fears of a full-blown tariff war [33]. Investors fled to traditional safe havens: gold soared to ~$4,000/oz (record highs) and long-term Treasuries rallied. Credit-scarce assets like rare-earth mining stocks ironically rallied on China news [34]. One analyst quipped that the tariff tweet was a 30-word ultimatum that single-handedly shocked markets, not a banking or earnings problem [35]. As TechStock² (ts2.tech) noted: “Crypto bloodbath: Digital assets plunged even more sharply. Bitcoin dropped under $110,000, and Ethereum and many altcoins fell over 20% in hours.” [36]
Experts emphasize it was a sudden, exogenous shock, not a sign of systemic failure. LPL strategists called the sell-off a normal “cooling-off” after a five-month rally [37]. JPMorgan economists and others warned that historically, tech and crypto often bounce back after October dips, but cautioned that volatility may linger given ongoing geopolitical risks.
Aftermath: Stabilization and Risk-Off Sentiment
Over the weekend (Oct. 11–12), President Trump began dialing back the rhetoric. He posted that “it will all be fine” and insisted the U.S. did not want to hurt China [38]. By Monday, Wall Street had partially recovered, and crypto markets rallied modestly. CoinDesk reported a brief Bitcoin rebound above $115K, as speculators took Trump’s comments as a ceasefire signal. However, the threat of renewed conflict remained. On Oct. 14, new Chinese sanctions (on a Korean shipbuilder) revived sell-off fears. Bitcoin slipped below $112K and Ether near $4,000 again that day [39]. Coindesk noted total crypto liquidations hit $630 million on Oct. 14 alone as risk aversion returned [40].
Expert Analysis & Outlook
Industry analysts say one positive outcome of the crash is that it “cleaned out the excessive leverage” in the system, resetting risk for now [41]. Nic Puckrin (Coin Bureau) remarked, “The good news is that this crash has cleaned out the excessive leverage and reset the risk in the market, for now.” [42]. Crypto options data from Derive.xyz showed traders aggressively buying protective puts on Bitcoin and Ether ahead of expiration dates [43], reflecting growing caution. Sean Dawson of Derive.xyz observed that volatility had “jump[ed] across the board” – a sign that “more people are worried about downward turns” [44].
Still, not everyone is bearish. Onchain analyst Willy Woo noted that Bitcoin’s funding flows held up better than altcoins, suggesting money is rotating into Bitcoin rather than fleeing crypto entirely [45]. Many crypto advocates argue the pullback is a buying opportunity: spot Bitcoin ETFs saw billions of dollars of inflows in early October, and institutional adoption continues to grow. As TechStock² reported, some analysts even predict Bitcoin could reach $130K–$160K again by late 2025, barring further shocks [46]. But tensions are high: veteran investor Robert Kiyosaki warned that “bubbles are about to start busting”, cautioning of a potential 50% drawdown in Bitcoin and gold before any new rally [47].
Geopolitical Context: Crypto Meets Trade War
This episode highlights how geopolitics now drives crypto. Only weeks earlier, cryptocurrencies were setting new records – Bitcoin above $126K and Ether near $4,300 – in what was called an “Uptober” rally. That surge was fuelled by ETF flows, inflation hedge demand, and a weak dollar [48]. But it came from a market riding high on confidence. The sudden trade war escalation shattered that calm. Even the WSJ observed that crypto prices now “respond to policy decisions from an administration whose members hold large stakes in the very assets they’re affecting” [49], noting that a Trump-backed crypto project token fell 30% on Friday. And when Washington and Beijing turned on each other (with China’s rare-earth export curbs and the U.S. tariff threat), crypto joined equities in tumbling. In short, the sector’s “geopolitical sensitivity” was on full display [50] [51].
Conclusion: A New Age of Volatility
The mid-October turmoil showed that crypto is no longer an isolated “safe haven” like digital gold – it’s highly reactive to real-world events. As one analyst put it, in a panic “Bitcoin traded more like a risk asset” alongside stocks [52], even as gold rallied. With trade tensions unresolved and U.S. elections looming, many experts predict crypto volatility will stay elevated. Some traders are using this shock as a reset: heavy liquidation has reduced leverage, and several indicators now suggest a floor is forming around current prices [53] [54]. Others warn to stay cautious: as Saxo Markets’ Neil Wilson noted, stretched positions mean “any bad news is a cue to sell risk” [55].
In any case, one lesson is clear: When global policy shifts suddenly, crypto markets can whiplash hard. The October 2025 crash may be studied for years as a stress-test of the bull market. For now, investors and analysts alike are watching closely – searching for clues in charts, expert reports, and the newswire – for where the next catalyst might come.
Sources: Major news and data reports from Reuters [56] [57], Wall Street Journal [58] [59], Bloomberg/Yahoo Finance, Crypto-specialist media (CoinDesk, Fortune) and TechStock² articles [60] [61] [62], including commentary by market analysts and crypto experts [63] [64] [65] [66]. These sources detail the events and expert reactions surrounding the unprecedented mid-Oct 2025 crypto sell-off.
References
1. ts2.tech, 2. www.fastbull.com, 3. www.reuters.com, 4. www.fastbull.com, 5. www.bitget.com, 6. www.reuters.com, 7. ts2.tech, 8. www.fastbull.com, 9. www.fastbull.com, 10. ts2.tech, 11. ts2.tech, 12. www.reuters.com, 13. www.reuters.com, 14. ts2.tech, 15. ts2.tech, 16. www.reuters.com, 17. www.reuters.com, 18. www.fastbull.com, 19. ts2.tech, 20. www.reuters.com, 21. www.bitget.com, 22. www.bitget.com, 23. www.bitget.com, 24. www.bitget.com, 25. ts2.tech, 26. www.fastbull.com, 27. www.fastbull.com, 28. www.fastbull.com, 29. www.fastbull.com, 30. www.bitget.com, 31. ts2.tech, 32. ts2.tech, 33. ts2.tech, 34. ts2.tech, 35. ts2.tech, 36. ts2.tech, 37. ts2.tech, 38. www.reuters.com, 39. www.coindesk.com, 40. www.coindesk.com, 41. www.reuters.com, 42. www.reuters.com, 43. www.reuters.com, 44. www.reuters.com, 45. www.reuters.com, 46. ts2.tech, 47. ts2.tech, 48. ts2.tech, 49. www.fastbull.com, 50. ts2.tech, 51. www.bitget.com, 52. ts2.tech, 53. www.bitget.com, 54. www.coindesk.com, 55. economictimes.indiatimes.com, 56. www.reuters.com, 57. www.reuters.com, 58. www.fastbull.com, 59. www.fastbull.com, 60. ts2.tech, 61. ts2.tech, 62. ts2.tech, 63. www.reuters.com, 64. ts2.tech, 65. www.bitget.com, 66. ts2.tech
