The cryptocurrency market experienced its largest single-day liquidation event on October 10, 2025, as U.S. President Donald Trump's announcement of 100% tariffs on Chinese imports triggered a $19.1 billion wipeout of leveraged positions. The shockwave erased $400 billion in market value, sending BitcoinBTC-- to $101,500 and EthereumETH-- to $3,373.67, while smaller altcoins like XRPXRP-- and DOGEDOGE-- plunged over 99% before partial recoveries. The collapse mirrored the synchronized sell-off in equities, with the Nasdaq dropping 3.6% and Treasury yields spiking, underscoring the interconnectedness of global risk assets .
Derivatives platforms bore the brunt of the carnage. Hyperliquid reported $10.28 billion in total liquidations, including a $203 million ETH-USDT position-the largest single liquidation of the day. Binance's futures insurance fund drained $188 million, while BNBBNB-- futures alone saw $706 million in liquidations. Analysts noted that real-time reporting delays on exchanges like Binance and Bybit likely understate the true scale, as these platforms limit liquidation order disclosures . The event surpassed the combined impact of the 2020 pandemic crash and the FTX implosion, marking a structural reset for leveraged crypto markets .
The liquidation cascade exposed years of accumulated leverage. Vincent Liu of Kronos Research called the tariffs "the spark," but emphasized that "leverage was the gasoline." Ethereum's $4.45 billion in liquidations, Solana's $2.02 billion, and XRP's $709 million losses highlighted the fragility of derivatives-heavy altcoins . David Jeong of Tread.fi labeled the event a "black swan," while Arthur Hayes of Bitstamp warned that "we won't see those levels on high-quality alts anytime soon," signaling a prolonged normalization phase .
Macroeconomic uncertainty looms as recovery efforts begin. The Bureau of Labor Statistics expedited September's CPI release amid a government shutdown, a move traders interpreted as a bid to stabilize markets before the next Federal Reserve meeting. Meanwhile, Bitcoin's dominance rose to 59.8%, reflecting a flight to safety as altcoins faced extreme dislocation. Zaheer Ebtikar of Split Capital predicted a "drawn-out bottoming process," with market makers absorbing inventory and arbitraging price gaps between spot and perpetual markets .
The fallout extends beyond crypto. Global trade tensions and supply chain risks now threaten semiconductor and rare-earth sectors, critical to blockchain infrastructure. Analysts at FalconX noted a surge in demand for downside protection, while Bitcoin's correlation with the U.S. dollar index (DXY) intensified, compounding pressure on leveraged longs. The event has reignited debates about crypto's role as a hedge against geopolitical instability, with some institutions viewing the crash as a necessary purge for healthier future rallies .
Source: [1] This is the Full Title of the First News Article (https://coin360.com/news/crypto-market-liquidation-2025-trump-tariffs)
[2] This is the Full Title of the Second News Article (https://www.cnbctv18.com/market/cryptocurrency/trump-tariffs-upend-crypto-market-trigger-record-liquidations-19712071.htm)
[4] Full Title of the Third Source Used (https://www.cryptotimes.io/2025/10/11/massive-19b-liquidation-hits-crypto-markets-after-trump-tariffs/)
[6] Full Title of the Fourth Source Used (https://www.coindesk.com/markets/2025/10/10/usd16b-in-longs-liquidated-as-wall-street-sell-off-extends-btc-eth-broader-crypto-market-meltdown)
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