Bitcoin News Today: Tariff Tremors Shatter Crypto: $19B Vanishes in 24 Hours

The cryptocurrency market experienced its largest liquidation event in history 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 China's rare-earth export controls, triggered a global risk-off sentiment, sending Bitcoin (BTC) and Ethereum (ETH) into steep declines and erasing over $19 billion in leveraged positions within 24 hours Finance-Monthly.com^[1].

Bitcoin plummeted from a peak of $122,000 to $104,800, while Ethereum dropped nearly 12% to $3,200. The total crypto market capitalization fell by 9% to $3.8 trillion, with altcoins suffering disproportionately. Solana (SOL), XRP, and other tokens lost 20%-30% of their value. Over 1.6 million traders were liquidated, according to data from CoinGlass, with the largest single liquidation reaching $203 million on Hyperliquid's ETH-USDT pair CoinPedia.org^[2].

The sell-off cascaded into traditional markets, with the S&P 500 and Nasdaq falling 2.7% and 3.6%, respectively. Analysts warned of contagion risks, noting that leveraged positions in crypto could spill into equities, commodities, and bonds as funds scramble for liquidity. "This is how contagion starts," one anonymous risk strategist at a major U.S. exchange told Bloomberg, highlighting the lack of standardized margin requirements in crypto spot markets compared to equities Bloomberg^[3].

Regulatory gaps exacerbated the crisis. U.S. spot crypto exchanges operate without federal-level circuit-breaker mechanisms, allowing uncontrolled deleveraging. Lee Reiners of Duke University's Global Financial Markets Center noted that the absence of legal safeguards akin to those in equities left the market vulnerable to rapid, unregulated unwinding of positions Duke University Global Financial Markets Center^[4].

The crisis also exposed structural weaknesses in on-chain protocols. A 40% de-pegging of Binance's USDe stablecoin triggered a chain reaction, wiping out revolving loans and forcing liquidations. Market makers, constrained by limited capital, prioritized larger projects, leaving smaller altcoins without support. "The plunge in altcoins was entirely due to market makers' inability to fully hedge," one crypto KOL analyzed, citing tiered funding allocations and post-Jump Capital imbalances ChainCatcher^[5].

Traders and analysts remain divided on the outlook. Mike McGlone of Bloomberg Intelligence described Trump's tariff shock as a "macro correction," akin to the 2019 trade war or 2022 Fed-driven pullbacks. Short-term volatility is expected to persist until 72 hours post-announcement, with Bitcoin hovering near $115,000–$118,000. However, a formal U.S. executive order or Chinese retaliation could prolong the downturn by weeks, intensifying leveraged unwinding and stablecoin adoption BeInCrypto.com^[6].

Longer-term, the sell-off may accelerate Bitcoin's adoption as a hedge against geopolitical uncertainty. Yet, repeated policy shocks could deter institutional capital, prolonging crypto's sensitivity to macro risks. "Those positions don't come back," said Zaheer Ebtikar of Split Capital, emphasizing the irreversible impact of the derivatives landscape reset CoinDesk^[7].