Trump’s Tariff Threat Sparked a Record $19 Billion Crypto Liquidation
A single social media post from President Donald Trump on October 10, 2025, set off the largest liquidation event in crypto market history, erasing more leveraged positions in 24 hours than any prior crash, including the 2021 record and the collapses tied to Terra and FTX.
What happened
On October 10, 2025, Trump posted that the United States would place a 100% tariff on Chinese imports starting November 1, a response to Beijing's new export restrictions on rare earth minerals used in chip manufacturing. Bitcoin, which had been trading above $120,000 before the post, fell to lows near $102,000 on some exchanges.
CoinGlass data showed roughly $19 billion in leveraged crypto positions liquidated within a 24-hour window, with long positions making up about 90% of that total. CoinGlass later said the real figure was likely higher, somewhere between $30 billion and $40 billion, once delayed reporting from slower exchanges was factored in. Even the conservative $19 billion figure is close to double the previous record of about $10 billion, set in April 2021 when Bitcoin fell from $64,000 to under $52,000 in the days following Coinbase's Nasdaq listing.
Bitcoin and Ethereum each accounted for well over a billion dollars of the liquidated positions, with figures cited across outlets putting Bitcoin at roughly $1.37 billion and Ethereum at about $1.26 billion. More than 1.6 million individual trader accounts were liquidated during the episode, a scale not seen in any earlier crypto downturn.
The source material also notes a separate, more recent episode: on June 4, Bitcoin briefly dropped below $62,000 as more than $1.5 billion in leveraged positions were liquidated, with ETF outflows and softer institutional demand cited as contributing pressures. And over the weekend of August 22-23, 2026, wallets connected to the official TRUMP memecoin moved $6.2 million in tokens to the exchange OKX, coinciding with a 33% price drop and a broader $109.66 million liquidation wave across Bitcoin and Ethereum. On-chain analysts reportedly traced that movement to specific wallets tied to the token's team.
Why it happened
According to the reporting, crypto markets had spent September and early October 2025 building up heavily one-sided, leveraged long positions. Bitcoin had touched a peak above $126,000 just days before the crash, and many traders were positioned for continued gains heading into what crypto traders refer to as "Uptober," a seasonal pattern in which Bitcoin has historically tended to rally during the month.
Trump's post landed during Asian trading hours, a period of thinner liquidity, leaving too few buyers to absorb the wave of selling. Exchange auto-liquidation systems began closing out over-leveraged long positions, which pushed prices lower and triggered further rounds of liquidations, a cascading effect described as the same feedback loop behind previous leverage-driven crashes, including 2021's.
The trigger this time came from outside the crypto industry entirely. There was no hack, no exchange failure, no stablecoin losing its peg. The event stemmed from a geopolitical dispute over rare earth minerals tied to semiconductor supply chains between the US and China. The tariff threat was later resolved through a US-China trade truce, but by then the market damage was already done. The same day, the S&P 500 fell 2.7%, its worst session since April, and the Nasdaq dropped 3.6%, according to broader market reporting cited alongside the crypto losses.
Who this affects
This episode mainly affects people holding leveraged positions in Bitcoin, Ethereum or other digital assets through margin or futures trading, where price swings can trigger automatic liquidations. It's also relevant to anyone following crypto-linked investment products, since ETF flows and institutional demand were cited as added pressures during a related downturn in June. The broader lesson applies to anyone who treats crypto holdings as insulated from geopolitical or macroeconomic news, since this event shows how a single policy statement, unrelated to blockchain technology itself, can ripple through leveraged markets within hours.
As the site's personal finance writer often notes when breaking down complex money and benefits news for everyday households, events like this are a reminder that leverage and volatility cut both ways, and that market structure, not just asset selection, shapes how sharply prices can move.
Anyone with exposure to crypto assets, leveraged trading products or related ETFs may want to review their own holdings and risk tolerance with a licensed financial professional before making decisions based on headlines like this one.
Source: Startup Fortune
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