Bitcoin News Today: Leverage's Reckoning: Tariffs Trigger Historic Crypto Collapse

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The cryptocurrency market experienced its largest liquidation event in history on October 10, 2025, as U.S. President Donald Trump's announcement of 100% tariffs on Chinese imports triggered a global sell-off. Data from Coinglass revealed that over $19.1 billion in leveraged positions were wiped out within 24 hours, with $16.7 billion attributed to long positions and $2.4 billion to short positions This is the Full Title of the First News Article^[1]. The collapse erased nearly $400 billion in total market value, pushing Bitcoin below $110,000 and Ethereum under $3,700. Hyperliquid, a derivatives exchange, reported $10.28 billion in liquidations, including a record $203 million ETH-USDT position Full Title of the Third Source Used^[3].

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The crisis was fueled by a combination of geopolitical tensions and excessive leverage. Trump's tariffs reignited fears of a trade war, with China's export restrictions on rare earth minerals exacerbating market anxiety This is the Full Title of the Second News Article^[2]. Analysts noted that the crypto market, already inflated by bullish momentum, became a "pressure cooker" for leveraged bets. "The tariffs were the ignition," said Ravi Doshi of FalconX, "and it lit the fuse under a market full of leveraged bets." Bitcoin dropped 12% to $102,000, while altcoins like Solana, XRP, and Dogecoin plummeted by 18–24% This is the Full Title of the Second News Article^[2].

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The liquidation cascade exposed vulnerabilities in derivatives markets. Binance's futures insurance fund drained $188 million to stabilize losses, and exchanges like Coinbase and Kraken faced outages due to surging trading volumes Full Title of the Third Source Used^[3]. Ethena's stablecoin USDe briefly depegged to $0.9996, highlighting systemic stress. Institutional traders, however, capitalized on the chaos: one whale reportedly pocketed $72 million shorting BTC and ETH Full Title of the Third Source Used^[3].

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The event dwarfed previous market shocks. The 2020 pandemic crash saw $1.2 billion in liquidations, while the FTX collapse in 2022 resulted in $1.6 billion Full Title of the Fourth Source Used^[4]. By contrast, Friday's liquidation was nearly 20 times larger, underscoring the explosive growth of leveraged trading. CoinGlass warned that actual figures could be higher, as Binance delayed reporting This is the Full Title of the First News Article^[1].

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Regulatory and macroeconomic uncertainties compounded the fallout. The U.S. government shutdown delayed key economic data releases, leaving traders in the dark as trade war rhetoric intensified Full Title of the Fifth Source Used^[5]. Meanwhile, the Federal Reserve's policy trajectory came under scrutiny, with some analysts warning that inflationary pressures from tariffs could force a delay in rate cuts.

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Long-term implications remain mixed. While the crash purged excessive leverage, experts caution that renewed trade tensions or regulatory crackdowns could stall recovery. Arthur Hayes of BitMEX called it a "structural reset," but noted that altcoins like Solana and XRP face "unthinkable lows" before stabilization Full Title of the Third Source Used^[3]. Institutional flows, including BlackRock's ETF investments, may provide a floor for recovery This is the Full Title of the Second News Article^[2].