Quick highlights
- More than $19 billion worth of crypto bets were wiped out in just one day.
- Roughly 1.6 million traders were forced out of positions as prices plunged.
- The sell-off followed President Trump’s 100% tariffs on Chinese goods and related export controls.
- Bitcoin and Ethereum saw double-digit intraday moves; liquidity dried up at peak panic hours.
- Exchanges and broker platforms reported outages and heavy order cascades during the crash.
What happened?
President Donald Trump announced an increase, effectively a 100% tariff, on Chinese imports and tighter export controls. The move rattled markets already jittery over geopolitics and supply risks. In the aftermath, crypto markets experienced a cascade of forced selling: more than $19 billion in leveraged long (and some short) positions were liquidated.
When and where?
In early October 2025, the market reacted instantly to the shock announcement. Within 24 hours, crypto exchanges around the world faced massive liquidations and widespread outages.
Why it mattered
Markets hate uncertainty. The tariff threat doubled down on fears of a renewed U.S.–China trade war, prompting risk-off moves in equities, commodities and crypto. Crypto’s structure, high leverage, thin liquidity in altcoins during stress hours, and automated margin liquidations magnified losses quickly.
How it affected crypto, simply
- Bitcoin: sharp intra-day drop, then partial recovery as buyers stepped in.
- Altcoins: many fell harder because lower liquidity and higher leverage ratios.
- Traders: around 1.6 million accounts liquidated, producing cascading stop-outs.
- Exchanges/brokers: some reported outages; order books thinned, making price moves more severe.
Expect continued volatility. Traders using leverage should cut exposure and set clear risk limits; long-term investors should separate noise from macro shifts.
Market response and policy angle
Governments and big funds may re-price geopolitical risk into all risk assets. The tariff move shows how quickly macro policy can ripple into crypto — a reminder that digital assets are not isolated from geopolitics.
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