Bitcoin News Today: Regulatory Gap Exposed as Crypto Market Loses $10B Overnight
The cryptocurrency market experienced its most severe single-day liquidation event on record following U.S. President Donald Trump's announcement of a 100% tariff on Chinese imports effective November 1, 2025. The move, framed as a response to Beijing's export controls on rare-earth materials, triggered a global risk-off sentiment, erasing $10 billion in leveraged positions within 24 hours and pushing BitcoinBTC-- and EthereumETH-- to multi-month lows.
Bitcoin (BTC) plummeted from a peak of $122,000 to $104,800, while EtherETH-- (ETH) fell nearly 12% to $3,200. Data from analytics firm CoinGlass revealed $9.55 billion in liquidated crypto positions, with the largest single liquidation-$87.53 million in BTC/USDT-occurring on HTX Exchange [1]. The total crypto market capitalization dropped 9% to $3.8 trillion, wiping out $400 billion in paper value. Altcoins faced even steeper declines, with XRPXRP--, SolanaSOL-- (SOL), and DogecoinDOGE-- (DOGE) losing 20–30% of their value [3].
The market turmoil extended beyond crypto, with the S&P 500 and Nasdaq falling 2.7% and 3.6%, respectively, marking their worst performance since April 2025 [1]. Analysts warned of contagion risks, as cascading margin calls could spread to traditional markets. "This is how contagion starts," said a risk strategist at a major U.S. exchange, noting that crypto's lack of standardized margin rules and circuit breakers exacerbates systemic risks [1].
The U.S. Treasury's lack of oversight in spot crypto markets has amplified volatility. Unlike equities, which operate under Dodd-Frank regulations, crypto spot exchanges set their own liquidation parameters, enabling rapid, unregulated deleveraging [1]. This regulatory gap was highlighted by the $19.13 billion in liquidations reported by Coinglass, though the actual figure may be higher due to Binance's one-second liquidation reporting limit [4].
Trump's tariff threat followed China's imposition of export-license requirements for goods containing more than 0.1% rare-earth materials, critical for electronics and defense manufacturing [1]. The escalation reignited memories of the 2018–2019 trade war, with analysts warning of long-term supply chain disruptions in semiconductors and blockchain infrastructure [2].
Market participants remain uncertain about the path forward. A relief rally is possible if Trump delays the tariffs or China relaxes export controls, but the $10 billion liquidation hole has permanently altered the derivatives landscape, according to Zaheer Ebtikar of Split Capital [1]. As of early Saturday, Bitcoin hovered near $111,000 with deeply negative funding rates, signaling sustained shorting pressure [1].
Regulatory scrutiny is intensifying, with the Commodity Futures Trading Commission (CFTC) overseeing crypto futures but leaving spot markets largely unregulated. Lee Reiners of Duke University's Global Financial Markets Center emphasized the absence of standardized risk controls in crypto, contrasting it with equities' structured safeguards [1].
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