The cryptocurrency market experienced its largest liquidation event in history on October 10–11, 2025, as $19.38 billion in leveraged positions were wiped out within 24 hours, according to data from Coinglass[1]. The crash followed U.S. President Donald Trump's announcement of 100% tariffs on Chinese imports and export controls on "critical software," triggering a global sell-off that sent BitcoinBTC-- (BTC) and EthereumETH-- (ETH) plummeting and exposed systemic vulnerabilities in the crypto ecosystem[2].
Bitcoin, the benchmark asset, dropped over 12% to nearly $102,000, erasing $5.39 billion in leveraged positions, while Ethereum fell below $4,000, with $4.45 billion in liquidations[1]. Altcoins fared worse: SolanaSOL-- (SOL) lost 18%, XRPXRP-- slid 13%, and DogecoinDOGE-- (DOGE) tumbled 24%, with combined liquidations exceeding $3 billion[4]. The total crypto market capitalization shrank by 9.2% to $3.76 trillion, and Bitcoin's dominance rose to 59.8% as investors fled risk assets[1].
The collapse was exacerbated by excessive leverage and thin liquidity. Over 1.6 million traders were liquidated, with the largest single position-a $203.36 million ETH-USDT trade on Hyperliquid-highlighting the fragility of leveraged bets[1]. Analysts noted that cross-margin trading and centralized exchange failures amplified the crisis, as forced liquidations created a self-reinforcing downward spiral[5].
Trump's tariffs, set to take effect on November 1, intensified fears of a trade war with China, which had already imposed restrictions on rare-earth mineral exports[2]. The move coincided with broader market turmoil, as the S&P 500 and Nasdaq posted steep declines, and the U.S. Dollar Index fell 0.57%. The Crypto Fear & Greed Index plummeted to "Extreme Fear," its lowest level since the 2020 pandemic crash.
Experts attributed the crash to a "perfect storm" of macroeconomic factors and overleveraged positions. Brian Strugats of Multicoin Capital estimated total liquidations could exceed $30 billion when accounting for smaller exchanges and DeFi platforms[2]. Ravi Doshi of FalconX called the tariff news "the ignition" for a market already primed for a correction due to aggressive leveraged trading[1].
The aftermath has sparked debates about regulatory reforms. Zaheer Ebtikar of Split Capital warned of a "structural reset" in altcoin markets, while Edul Patel of Mudrex suggested the crash could create buying opportunities for patient investors[2]. Meanwhile, concerns over exchange reliability grew after Binance, Coinbase, and Kraken faced outages during the volatility[4].
As the market stabilizes, attention turns to China's response and the trajectory of U.S. policy. While some view the liquidation as a necessary deleveraging event, others caution that renewed trade tensions could prolong uncertainty. The path to recovery, analysts say, will depend on macroeconomic stability, regulatory clarity, and the resilience of crypto's foundational technologies.
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