Bitcoin News Today: Crypto's 'Digital Gold' Myth Crumbles in $20B Liquidation Rout

The crypto market experienced its largest liquidation event on record as global risk-off sentiment intensified following U.S. President Donald Trump's announcement of 100% tariffs on Chinese imports. By October 11, 2025, over $19.1 billion in leveraged positions were liquidated, with $16.7 billion attributed to longs across major exchanges . Bitcoin (BTC) fell below $104,000 during the crash, erasing its early October gains above $126,000, while Ethereum (ETH) dropped to $3,373.67 and altcoins like XRP, Solana (SOL), and Dogecoin (DOGE) saw intraday declines exceeding 30% . The total crypto market capitalization contracted to $3.74 trillion, a $400 billion wipeout from its prior peak .

The sell-off was triggered by renewed U.S.-China trade tensions, which reignited macroeconomic fears after a period of relative stability. Trump's tariff threats, announced via Truth Social, prompted a global market rout, with the S&P 500 losing $1.2 trillion in value within six hours and the U.S. Dollar Index (DXY) surging to 107.1 . Analysts noted that the crypto market's overbought state and excessive leverage-particularly in altcoins-amplified the downturn. CoinGlass data indicated that the liquidation event was nearly 20 times larger than the March 2020 crypto crash and surpassed the impact of the FTX collapse .

Despite the volatility, institutional adoption of Bitcoin continued to grow, with spot ETFs attracting over $3.2 billion in inflows during October's rally before the crash. BlackRock's ETF alone drew $1.8 billion in early October, reflecting sustained demand for crypto as a hedge against macroeconomic uncertainty . However, the market's correlation with equities became evident during the selloff, as Bitcoin and gold diverged from their "digital gold" narrative. Gold surged to $4,035/oz, while Bitcoin mirrored equities' risk-off trajectory .

Amid the turmoil, MAGACOIN FINANCE emerged as a speculative focal point, with analysts forecasting up to 50x returns for the project. The token, positioned as a next-generation meme coin, has attracted retail and institutional investors through its capped supply, transparent audits, and whale-backed inflows. Its presale stages have sold out rapidly, with early buyers accumulating at prices below $0.0001. Analysts attribute its momentum to a shift in retail sentiment toward projects with structured tokenomics and credibility, contrasting with older meme coins like Dogecoin and Shiba Inu (SHIB), which are seen as saturated .

The post-crash outlook remains mixed. While short-term volatility is expected to persist due to thin liquidity over the weekend and geopolitical uncertainties, some analysts argue the liquidation represents a healthy reset for the market. Institutional inflows into Bitcoin ETFs suggest continued long-term demand, and the Federal Reserve's anticipated rate cuts could reinvigorate risk assets if trade tensions ease. However, renewed escalations in U.S.-China trade disputes or a U.S. recession could prolong the downturn .

Sources:

[1] Coindesk (https://www.coindesk.com/markets/2025/10/10/usd16b-in-longs-liquidated-as-wall-street-sell-off-extends-btc-eth-broader-crypto-market-meltdown)

[2] Tech Space 2.0 (https://ts2.tech/en/crypto-market-carnage-bitcoin-crashes-from-record-highs-as-tariff-bombshell-wipes-out-20b/)

[3] Coin360 (https://coin360.com/news/crypto-market-liquidation-2025-trump-tariffs)

[4] CoinDesk (https://www.coindesk.com/markets/2025/10/11/v-shaped-rally-or-gradual-reset-btc-eth-xrp-sol-face-slow-bottoming-process-after-usd16b-liquidation-shock)

[5] CoinGlass (https://www.coinglass.com)

[8] Invezz (https://invezz.com/news/2025/09/04/shib-vs-doge-was-yesterday-magacoin-finance-takes-the-meme-coin-crown-ahead-of-q4-run/)