Bitcoin News Today: Trump Tariffs Spark $19B Crypto Collapse, Exposing Market's Fragile Core

The global cryptocurrency market experienced its largest liquidation event in history on October 10, 2025, with over $19 billion in leveraged positions wiped out within 24 hours, according to data from CoinGlass. The collapse, triggered by U.S. President Donald Trump's announcement of a 100% tariff on Chinese imports and export controls on critical software, sent Bitcoin (BTC) plummeting nearly 10% to below $105,000 and Ethereum (ETH) falling almost 14% to $3,742.88. The selloff rippled through altcoins, with Solana (SOL) dropping nearly 20% and XRP losing 17% in value.

The market turmoil was exacerbated by automated deleveraging systems on exchanges, which forced the closure of over 1.6 million traders' positions. Exchanges like Binance and Hyperliquid reported systemic issues, including frozen dashboards and erroneous price displays, as liquidity vanished and margin calls cascaded. Nick Forster of Derive.xyz noted that market makers withdrew quotes to avoid breaching risk limits, creating a "self-reinforcing cascade of liquidations."

The crash followed a volatile week of geopolitical escalation. Trump's initial threat to cancel a planned meeting with Chinese President Xi Jinping and his subsequent trade announcement intensified fears of a global supply chain disruption, particularly in tech and rare earth minerals. However, both sides later signaled de-escalation, with Trump tweeting, "Don't worry about China, everything will be fine!" and the U.S. Treasury Secretary affirming "substantial communication" to ease tensions.

Despite the sharp downturn, the market showed signs of recovery by October 13. Bitcoin rebounded to $114,683, up 6.9% from its Sunday low, while Ethereum regained 8% to hover near $4,100. Analysts attributed the partial rebound to reduced leverage and improved liquidity but warned of ongoing risks. Joel Kruger of LMAX Group noted that while the selloff appeared liquidity-driven, "the setup for crypto remains vulnerable," citing unresolved U.S.-China trade uncertainties and crypto infrastructure fragility.

The event exposed systemic weaknesses in crypto markets, including overleveraged positions and opaque liquidation mechanisms. Jeff Yan of Hyperliquid criticized centralized exchanges for withholding key liquidation data, while Omer Goldberg highlighted vulnerabilities in DeFi price oracles. Andrew Stern raised concerns about potential insider activity, citing unverified reports of a trader profiting $192 million within 30 minutes of the crash.

Human and emotional costs also emerged. While no verified evidence confirmed claims of 2,000 trader suicides, one case-Ukrainian influencer Konstantin Galish's death-highlighted the psychological toll. The incident underscored the need for mental health awareness in trading practices, a topic gaining traction among regulators.

Looking ahead, experts remain cautiously optimistic. Institutional demand for crypto, including pending U.S. spot ETF approvals, and the completion of the Solana Firedancer upgrade are seen as potential catalysts. However, volatility persists, with Bitcoin options volatility surging and analysts warning of further turbulence.