Bitcoin News Today: Geopolitical Trade War Fears Trigger $560B Crypto Crash as Trump's Tariffs Spark Panic

The global cryptocurrency market experienced its most severe correction of 2025 following U.S. President Donald Trump's announcement of 100% tariffs on Chinese exports, effective November 1, 2025. The shockwave triggered a 10% plunge in crypto markets, erasing $560 billion in value within 24 hours. Bitcoin (BTC) fell 8% to $112,000, while Ethereum (ETH) dropped 12.7% to $3,778.31. Total market capitalization fell to $3.74 trillion from $4.30 trillion, with over $19 billion in liquidations reported, impacting 1.6 million traders .

The liquidation event, the largest in crypto history, saw $7 billion in positions wiped out within the first hour of trading on October 10, according to Coinglass data. Long positions accounted for $16.81 billion of the losses, while short positions lost $2.5 billion. Major exchanges, including Binance, reported delays due to surging trading volumes, which spiked 145% to $183.88 billion for BTC and 148% for ETH .

The tariffs were a direct response to China's imposition of export controls on rare earth minerals, a move Trump described as "extraordinarily aggressive." The announcement reignited fears of a global trade war, with traditional markets also reacting sharply: the S&P 500 fell 2.7%, and gold rose 1.5% as investors sought safe-haven assets .

Altcoins faced even steeper declines. Binance Coin (BNB) dropped 6.6%, XRP fell over 22%, and meme coins were among the hardest-hit. The meme coin sector's market cap plunged 20% to $57.08 billion, with Dogwifhat (WIF) and Floki losing 28% and 22%, respectively . Chinese-themed and AI-themed meme coins saw drops of 39% and 30%, reflecting heightened risk-off sentiment .

Despite the panic, some analysts view the crash as a correction rather than a prolonged bear market. Edul Patel, CEO of Mudrex, noted historical precedents of October corrections followed by relief rallies and highlighted the potential for capital rotation into crypto amid gold's overbought conditions. He also pointed to anticipated U.S. spot altcoin ETF approvals as a catalyst for renewed momentum .

However, the immediate outlook remains fragile. The Crypto Fear & Greed Index plummeted from 64 to 27, entering the "Fear" zone, while the market's technical indicators showed signs of exhaustion. Bitcoin's 50-day and 200-day moving averages now sit at $114,500 and $106,600, respectively, with further declines threatening key support levels .

The geopolitical tensions underscore the macroeconomic risks facing crypto markets. Trump's additional export controls on "critical software" and the uncertainty surrounding U.S.-China trade relations have amplified volatility. While institutional demand for Bitcoin and Ethereum remains strong, the lack of new economic data due to the U.S. government shutdown has left investors navigating a high-stakes environment .

[1] BusinessToday.in (https://www.businesstoday.in/personal-finance/investment/story/crypto-crash-19-bn-wiped-out-as-trumps-100-china-tariff-sparks-largest-liquidation-in-history-497823-2025-10-11)

[2] CoinDesk (https://www.coindesk.com/markets/2025/10/10/bitcoin-crashes-below-usd110k-cryptos-in-freefall-on-further-trump-tariff-on-china)

[3] InsideBitcoins.com (https://insidebitcoins.com/news/crypto-market-plunges-10-liquidations-hit-19b-as-donald-trump-announces-100-tariffs-on-china)

[5] Cryptoticker.io (https://cryptoticker.io/en/bitcoin-crash-trump-china-tariff-market-meltdown/)

[8] Coindesk.com (https://www.coindesk.com/markets/2025/10/08/bitcoin-to-usd140k-by-month-end-bullish-hopes-remain-even-as-tuesday-drop-sends-eth-xrp-sol-down-5)