Bitcoin News Today: Crypto's Risk-Off Mirror: Trump Tariffs Spark $200B Market Panic as Stocks Plummet

Source: [1] Coindesk (https://www.coindesk.com/markets/2025/10/10/bitcoin-crashes-below-usd110k-cryptos-in-freefall-on-further-trump-tariff-on-china) [2] Beincrypto (https://beincrypto.com/trump-china-traiff-threat-crypto-market-cr/) [3] TheStreet (https://www.thestreet.com/crypto/business/trump-china-tariff-crypto-crash-exchange)

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The U.S. crypto market experienced a historic selloff following President Donald Trump's announcement of a 100% tariff on Chinese imports, triggering over $7.44 billion in liquidations within hours. Bitcoin (BTC) plummeted below $110,000, a 12% drop from the previous 24-hour high, while Ethereum (ETH) and major altcoins like XRP and Solana (SOL) fell by 16%-30%. The total crypto market capitalization dropped from $4.25 trillion to $4.05 trillion, erasing nearly $200 billion in value, according to CoinGecko.

The turmoil began after Trump's Truth Social post late Friday, which canceled his planned meeting with Chinese President Xi Jinping and outlined retaliatory measures against China's rare earth export controls. "We will impose export controls on any and all critical software," he stated, escalating trade tensions to their highest level since 2019. The announcement triggered immediate market panic, with Bitcoin dropping $3,000 in minutes and exchanges like Binance and Coinbase reporting system strain due to surging liquidation activity.

CoinGlass data revealed that leveraged traders bore the brunt of the crash, with $7.44 billion in positions liquidated. Long positions accounted for $670 million of the losses, while short sellers faced larger blows. The largest single liquidation occurred on Hyperliquid, wiping out $15.5 million in a BTC-USDT short. Analysts attributed the volatility to a combination of Trump's policy shock, pre-existing "overbought" conditions in crypto, and cross-market spillover from traditional equities. The S&P 500 erased $1.5 trillion in value within 40 minutes of Trump's post, while the Nasdaq fell 3.56%.

The sell-off underscored crypto's growing sensitivity to macroeconomic and geopolitical events. "This is a risk-off shift mirroring traditional markets," said Ram Ahluwalia, founder of Lumida Wealth. Prominent trader Bob Loukas likened the crash to the 2020 pandemic-induced selloff, calling it a "leverage reset." Altcoins were disproportionately affected, with tokens like Cardano (ADA) and Chainlink (LINK) falling as much as 40%.

Binance and Coinbase issued statements assuring users of fund safety amid system outages. Binance's CEO, Richard Teng, emphasized active monitoring of the situation, while Coinbase attributed latency issues to high transaction volumes. The crisis highlighted vulnerabilities in leveraged trading, with on-chain data showing 203,684 traders liquidated in the 24-hour period.

Market analysts warned of prolonged volatility if U.S.-China tensions escalate further. "If no new measures are announced, stabilization may occur next week," said a Beincrypto analysis, though a formal executive order or Chinese retaliation could extend the downturn by weeks. Long-term risks include a broader macro correction akin to the 2019 tariff shock or 2022 Fed-driven sell-offs, depending on policy clarity and institutional confidence.

As of October 10, 2025, Bitcoin traded near $114,000, down 6% from its intraday high. The CBOE Volatility Index (VIX) spiked above 22, reflecting heightened market anxiety. Investors remain cautious, with many awaiting clarity on Trump's trade strategy and China's potential countermeasures.