Bitcoin News Today: Trump's Tariff Policy Sparks $19B Crypto Liquidation, Exposing Market Fragility

Bitcoin's price plummeted following U.S. President Donald Trump's announcement of a 100% tariff on Chinese imports, triggering the largest liquidation event in crypto history. By midday on October 10, 2025, over $19.1 billion in leveraged positions had been liquidated, with $16.7 billion attributed to long positions alone Coindesk^[1]. The sell-off was exacerbated by renewed trade war fears and the U.S. government shutdown, which delayed key economic data releases, heightening market uncertainty Coindesk^[1].

Bitcoin (BTC) dropped below $110,000, marking a 10% decline in 24 hours, while Ethereum (ETH) and other major cryptos fell 15%-30% Coindesk^[1]. The total crypto market capitalization fell to $3.87 trillion, down from a peak of $4.25 trillion earlier in the week Coingabbar^[7]. Ethena's stablecoin USDe briefly dipped below $1, highlighting peg instability during volatile price swings Coindesk^[1].

The liquidation surge was concentrated on centralized derivatives exchanges. Binance and Bybit reported $204 million and $461 million in liquidations, respectively, with 93% of Bybit's losses stemming from short positions BeInCrypto^[3]. Hyperliquid, a decentralized exchange, also faced $4 million in losses after a whale's $200 million ETH long position was liquidated Coinedition^[4]. These events underscored the fragility of high-leverage trading strategies during rapid price reversals.

Market analysts attributed the crash to Trump's rhetoric, which reignited macroeconomic fears. The U.S. president framed China's rare-earth export controls as "hostile," prompting retaliatory tariff threats that triggered a global "risk-off" selloff Coingabbar^[7]. The Kobeissi Letter estimated $9 billion in liquidations over 24 hours, with over 200,000 traders forced to exit positions Coinspeaker^[9].

The impact extended beyond crypto. Traditional markets mirrored the downturn, with the S&P 500 and Nasdaq Composite falling 1.6% and 1.3%, respectively, as investors shifted to safe-haven assets like gold . U.S. spot Bitcoin ETFs, however, continued to attract institutional demand, with cumulative inflows exceeding $50 billion BeInCrypto^[3].

Hyperliquid responded to its $4 million loss by reducing maximum leverage for BTC and ETH to 40x and 25x, respectively, to mitigate future risks Coinedition^[4]. The exchange's native token, HYPE, dropped 8.5% to $12.54 following the incident MSMTimes^[5].

The liquidation event highlights the interconnectedness of global markets and the crypto sector. As Trump's policies remain in flux, traders are bracing for further volatility, with November 2025's tariff implementation date serving as a key watchpoint Coinspeaker^[9]. The incident also prompted exchanges to reassess risk management protocols, particularly for ultra-high leverage positions MSMTimes^[5].