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1Clear out junk files and repair common Windows errors2Fix the driver behind crashes, sound loss and screen glitches3Repair Windows errors before they cause bigger problemsShort answer: The crypto flash crash of October 10–11, 2025 began after President Donald Trump announced that the United States would impose an additional 100% tariff on Chinese imports and restrict exports of critical software. But the tariff announcement was the catalyst, not a complete explanation for the damage.
Bitcoin fell more than 10% in the initial selloff, Ether dropped roughly 12%–16%, and XRP, Solana and other altcoins suffered substantially larger percentage declines. The shock hit a market already carrying heavy derivatives leverage. Falling prices triggered margin calls and automatic liquidations, while thin weekend liquidity, exchange-specific pricing and collateral problems accelerated the decline.
Widely cited data recorded approximately $19 billion in reported leveraged positions liquidated across more than 1.6 million reported positions or events. That figure is not the same as $19 billion in investor cash disappearing, and it may be a lower bound because exchange liquidation reporting is incomplete. Some later estimates put the true total at $30 billion–$40 billion.
The most accurate description is therefore: a macro-triggered crypto liquidation cascade with flash-crash characteristics. Trump’s announcement lit the fuse; leverage, liquidity and exchange mechanics determined the size of the explosion.
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Important date clarification: This article examines the October 10–11, 2025 crash. It is not a report of a new August 2026 market event. The 100% tariff was later overtaken or de-escalated by a subsequent U.S.–China trade arrangement, so it should be described as a market-moving threat rather than a measure that definitely remained in force.
What was Trump’s surprise?
On October 10, 2025, Trump used Truth Social to announce that the United States would impose an additional 100% tariff on Chinese imports, beginning November 1, 2025, or earlier. He also threatened export controls on what he described as any and all critical software.
Trump presented the move as a response to China’s new restrictions on rare-earth exports. The relevant posts and their archived timestamps are available in the American Presidency Project archive.
The market reaction was immediate. The post was timestamped at approximately 1:50 p.m. Pacific time, although some market analyses use UTC and assign slightly different minutes to the announcement, the first acceleration and the most violent liquidation phase. Contemporaneous coverage reported Bitcoin falling about $3,000 around the time the post circulated.
The announcement mattered because it suggested a sharp escalation in the U.S.–China trade conflict at a time when investors were already sensitive to interest rates, global growth and risk appetite. Crypto traders did not need to believe that the tariff would definitely take effect for them to reduce exposure. A credible threat of a broader trade war was enough to prompt rapid repricing.
The Chinese announcement that preceded it
On October 9, China announced new export-control measures involving rare-earth materials, equipment and related technologies. The measures also covered certain medium and heavy rare-earth elements, batteries and synthetic graphite, according to Chinese government reporting.
It is misleading to call the policy simply a blanket rare-earth export ban. China’s Ministry of Commerce described the measures as export controls intended to refine its export-control system. It said eligible applications could receive licenses and characterized the policy as compatible with lawful, compliant civilian trade. The official explanation is set out in the Ministry of Commerce statement.
That created two competing interpretations:
- U.S. and market interpretation: China had taken an aggressive step that could threaten global manufacturing and supply chains.
- Chinese government characterization: The measures were licensing-based export controls, not an absolute ban on all rare-earth trade.
The distinction matters because financial markets trade on perceived risk and possible future outcomes, not only on policies that have already taken effect. Trump’s response transformed a supply-chain dispute into a broader global risk-off event.
Timeline of the October crash
- October 9: China announced new rare-earth export controls covering specified materials, technologies and related products.
- October 10, morning: Trump criticized China’s position and signaled that major retaliation was being considered.
- October 10, approximately 1:50 p.m. Pacific time: Trump posted the threat of an additional 100% tariff on Chinese imports, effective November 1 or sooner, along with critical-software export controls.
- Immediately afterward: Bitcoin accelerated lower, with Ether, XRP, Solana, Dogecoin and other cryptoassets falling more sharply. Bitcoin moved below $110,000 and Ether below $3,700 in contemporaneous market coverage.
- October 10–11: The decline became a leveraged liquidation cascade. Liquidation activity was concentrated in an extremely short period, even though the broader market weakness extended over roughly a day.
- October 12: Trump posted a more conciliatory message telling investors not to worry about China. Crypto prices rebounded as traders reduced the probability of an immediate escalation.
- Late October and November: A later U.S.–China trade arrangement de-escalated key measures. The White House said China suspended implementation of its October 9 rare-earth controls and the United States maintained suspension of heightened reciprocal tariffs until November 10, 2026. See the White House fact sheet.
The later political reversal helps explain the rebound, but it does not erase what happened in the derivatives market during the crash.
How far did Bitcoin, Ethereum and XRP fall?
There is no single percentage that accurately describes the entire episode. Crypto trades continuously across multiple centralized exchanges, decentralized venues, spot markets and perpetual-futures markets. The answer changes depending on whether the comparison uses an intraday high, a daily close, a 24-hour change or a particular exchange’s low.
| Asset or market | Reported move | How to interpret it |
|---|---|---|
| Bitcoin | More than 10% lower in the initial 24-hour coverage; one later data window placed the low near $104,782 | Exact loss depends on the reference price, exchange and time window |
| Ethereum | Roughly 12%–16% lower in major reports; one later data window placed it near $3,436 | Intraday and 24-hour measures produced different percentages |
| XRP | Roughly 20%–30% lower in contemporaneous coverage, with some venue-specific dislocations exceeding that range | XRP’s low was not identical across exchanges |
| Solana | Large double-digit decline, with some reports showing a temporary loss exceeding 40% | Illustrates why altcoins were more vulnerable than Bitcoin |
| BNB and other altcoins | Sharp declines alongside the wider altcoin market | There is no single defensible percentage for every token or venue |
| Total crypto market value | Approximately $350 billion–$500 billion reported as erased during the initial panic | Estimated market-cap change is not the same as realized investor losses |
CoinDesk’s contemporaneous report described Bitcoin below $110,000, Ether below $3,700 and XRP, Solana and Dogecoin down approximately 20%–30% at points in the move. Sygnum’s analysis put Bitcoin’s decline at roughly 10%, Ether and Solana at roughly 20% and XRP at more than 30%. A later CoinGecko analysis used a different window and cited lows of approximately $104,782 for Bitcoin and $3,436 for Ether.
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These differences are not necessarily contradictions. During a disorderly market, prices can diverge materially between venues, particularly when market makers withdraw and liquidation engines rely on different mark-price and collateral-price rules.
Was it a correction, a flash crash or a liquidation cascade?
The event contained elements of all three descriptions:
- A market correction is a broad decline that can unfold over days or weeks.
- A flash crash is a rapid and disorderly collapse, often followed by partial stabilization or a rebound.
- A liquidation cascade occurs when falling prices force leveraged positions to close, creating additional selling that pushes prices lower and triggers more forced closures.
The most precise label is macro-triggered liquidation cascade with flash-crash characteristics. Amberdata reported that approximately $3.21 billion in positions disappeared during a single minute at the peak. CoinGecko reported approximately $6.93 billion of liquidations during the most violent 40-minute period. Those are provider-specific estimates, not a universally audited tick-by-tick total. The Amberdata analysis and CoinGecko timeline provide the underlying descriptions.
Why did a tariff announcement hit crypto so hard?
The political announcement supplied the shock. Market structure supplied the amplification.
1. Investors repriced global risk
A possible 100% tariff on Chinese imports implied higher trade friction, supply-chain disruption and a greater risk of weaker global growth. Traders responded by reducing positions viewed as sensitive to broad risk appetite. Bitcoin may be promoted at times as a hedge or safe haven, but the October event showed that it can trade as a high-beta risk asset when leveraged investors are forced to de-risk.
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Bitcoin and Ether had recently rallied, encouraging traders to position for additional gains. When many traders are long the same market, a relatively ordinary decline can become dangerous: the first sellers push prices toward liquidation levels that create more forced sellers.
3. Derivatives created automatic selling
Futures and perpetual-futures contracts allow traders to control a large position with a smaller amount of collateral. If the market moves against a long position and the account falls below its maintenance-margin requirement, the exchange can close the position automatically.
For example, $10,000 of collateral supporting a 10-times leveraged $100,000 long position can be severely impaired by a roughly 10% adverse move. In practice, liquidation can occur earlier because of maintenance-margin requirements, fees, funding payments, slippage and the exchange’s risk rules. At higher leverage, the liquidation threshold is much closer.
4. Weekend liquidity was thinner
The shock arrived near the weekend, when order books can be less deep and some market makers reduce their risk. If fewer bids are available near the current price, a large market sell order moves the price further than it would in a deeper market. The Kaiko analysis documented thinning liquidity and market-maker withdrawal during the event.
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5. Liquidation engines fed on the decline
Forced closures are not patient sellers waiting for a better price. They are risk controls designed to protect the exchange and lenders. A wave of long liquidations therefore creates urgent selling, which can push the market into the next group of liquidation levels.
6. Different tokens were treated as one risk basket
Bitcoin, Ether, XRP, Solana and BNB have different networks, use cases and investor bases. During normal conditions those differences may matter. During forced deleveraging, traders often sell whatever is liquid or pledged as collateral. Correlations rise because the immediate objective is to reduce exposure and raise collateral, not to distinguish carefully between protocols.
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7. Crypto was being used as collateral
Some derivatives and lending positions were supported by cryptoassets, including yield-bearing, wrapped or liquid-staking-related tokens. A fall in the displayed price of collateral can cause a second layer of forced selling: the trader loses value in the collateral and must also close the position it supports.
8. Fragmented venues produced uneven prices
Centralized exchanges, decentralized exchanges, spot markets and derivatives platforms do not share one universal price. Each may use its own index, mark-price formula, collateral valuation and liquidation process. During a liquidity shock, those differences can produce an extreme price on one venue without an equally severe decline in the broader market. The extreme price can still matter if that venue’s liquidation engine uses it.
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Repair common Windows errors and clear accumulated junk for a smoother, more stable PC - no reinstall needed.Free scan · no reinstallThe Bank for International Settlements identified high volatility, low liquidity, automated derivative liquidations, high leverage and the use of cryptoassets as margin as important amplifiers of the event.
What does the reported $19 billion liquidation figure mean?
It means the notional value of leveraged positions forcibly closed—not $19 billion in cash disappearing from bank accounts.
CoinGlass-related reporting cited approximately $19 billion, or about $19.1 billion, in liquidations over the relevant period and more than 1.6 million reported positions or liquidation events. But that number should not be treated as a perfectly measured final total.
Exchanges do not expose identical data. Some limit the number of liquidation events reported per second, and the public data may omit positions closed through internal risk systems or venues that report differently. The BIS described available liquidation figures as a lower bound. Later reporting on an ESMA assessment noted that some analysts estimated the true amount at $30 billion–$40 billion.
Keep four different concepts separate:
| Term | What it measures | What it does not measure |
|---|---|---|
| Liquidated notional | The face value of leveraged contracts forcibly closed | It does not equal the trader’s loss or the amount of cash deposited |
| Realized loss | The actual loss recognized when a position is closed, including relevant costs | It is not necessarily equal to the position’s full notional value |
| Market-cap decline | A change in token price multiplied by the reported supply | It is not a direct cash outflow; the entire market cap was not sold |
| Spot-holder loss | A decline in the value of an unleveraged holding | It remains generally unrealized until the holder sells |
Thus, saying that the crash wiped out $19 billion can mislead readers. The defensible statement is that at least approximately $19 billion in reported leveraged notional was forcibly liquidated, while the market’s estimated capitalization fell by hundreds of billions and many unleveraged holders experienced paper losses.
The Binance, USDe and collateral controversy
The macro explanation does not fully account for the sharpest venue-specific price dislocations. During the crash, Ethena’s USDe briefly traded near $0.65 on Binance. Binance-listed BNSOL and WBETH also experienced sharp price dislocations. Kaiko reported USDe trading around $0.64 on Binance while broader market index rates did not fall below approximately $0.95.
That distinction is important. The evidence does not show that USDe simultaneously collapsed to the same level across the entire crypto market. It shows a severe Binance-specific deviation that mattered because these assets were being used as collateral in some derivatives, margin and lending products.
If an exchange’s collateral-pricing system marks an asset sharply lower, traders can lose borrowing capacity even when the asset’s broader market price is considerably higher. That can create additional liquidations:
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- The macro shock pushes liquid assets lower.
- Market makers withdraw and arbitrage becomes slower or more expensive.
- A collateral token trades at a deep discount on one venue.
- The exchange’s risk system marks collateral lower or uses the venue price in its calculations.
- Accounts fall below maintenance margin.
- Those accounts are liquidated, adding more selling pressure.
Kaiko’s research associated the affected collateral dislocations with the broader stress. The BIS reported that the depegging of the three affected assets was associated with roughly $600 million in customer liquidation losses and that Binance announced approximately $283 million in compensation. Binance also announced compensation and changes to its risk-control and pricing processes in its official response.
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What remains disputed?
The industry has not established that Binance alone caused the entire crash. The competing explanations are:
- Binance’s position: The macro shock came first, the market was already excessively leveraged, and most liquidations occurred before the USDe price deviation. Thin liquidity and delayed cross-venue arbitrage then amplified the stress.
- OKX founder Star Xu’s position: Binance yield campaigns encouraged leverage loops involving USDe and materially worsened the cascade.
- Critics of that explanation: The sharpest USDe deviation was primarily Binance-specific, while the liquidation wave spread across numerous venues. That suggests the depeg was an amplifier rather than the sole origin.
- Later regulatory framing: ESMA indicated that Binance’s internal pricing and collateral mechanics may have been exploited or may have materially amplified the crash, but did not establish one complete, single-cause explanation.
The appropriate conclusion is narrower and stronger than either extreme: Binance-specific collateral and pricing mechanics appear to have increased losses for some customers, but the public evidence does not establish that Binance created the global crash from nothing. A macro shock, crowded leverage and broad liquidation activity were already present.
For a summary of the competing Binance and OKX claims, see CoinDesk’s report.
Were whales or insiders positioned before Trump’s post?
Reports and social-media posts pointed to large short positions appearing shortly before the announcement. That is a legitimate reason to examine trading records, but it is not proof of insider trading, coordination or a pre-planned attack.
Several separate questions must be answered before a suspicious trade can be treated as evidence of foreknowledge:
- Who controlled the account?
- When was the position opened and when was it closed?
- Was it a directional short, or a hedge for an existing spot position?
- Did the trader actually know about the presidential post in advance?
- Were profits realized, or did the trader later lose money?
- Did a regulator or court confirm misconduct?
The public evidence reviewed for this event does not establish that the traders had advance access to Trump’s announcement or that the crash was coordinated. The responsible formulation is that large pre-announcement short positions prompted speculation about possible foreknowledge, but the allegation remains unproven. The post-crash debate and allegations were also discussed in Forbes coverage.
What happened after the crash?
The event was partly reversed in the political arena. On October 12, Trump posted a conciliatory message about China, and Bitcoin, Ether and other tokens rebounded. Contemporaneous reporting covered the reassurance and initial recovery.
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China also emphasized that its rare-earth measures were export controls rather than an absolute ban. Later, the United States and China reached a trade arrangement under which China suspended implementation of the October 9 controls and the United States maintained suspension of heightened reciprocal tariffs until November 10, 2026.
This follow-through supports two conclusions:
- The crash was not automatically the beginning of a permanent crypto collapse. Prices recovered some of the lost ground as the immediate policy risk was reduced.
- The event was not merely a harmless dip. The liquidation wave, market-depth problems and collateral dislocations exposed vulnerabilities that can remain even after the original headline fades.
The threatened 100% tariff should therefore be described as a market-moving threat that was later superseded or de-escalated, not casually as a tariff that definitely stayed in force.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Could another liquidation cascade happen?
No indicator can reliably predict the exact timing of another crash. But traders can identify conditions that make a market more fragile. The following are risk indicators, not guaranteed short-term trading signals.
| Indicator | Why it matters | Important limitation |
|---|---|---|
| Futures open interest | Shows how much derivatives exposure is outstanding. A sharp increase can mean more positions are available to be liquidated. | High open interest can accompany a healthy rally; it is not inherently bearish. |
| Funding rates | Persistently positive funding can indicate that leveraged longs are paying to remain open. | Funding can stay elevated during a sustained uptrend and cannot identify the trigger by itself. |
| Futures basis | A wide gap between futures and spot prices can signal aggressive leverage or crowded expectations. | Basis also reflects interest rates, settlement conventions and institutional hedging. |
| Order-book depth | Thin bids and asks mean relatively small orders can produce larger price moves. | Displayed liquidity can disappear during stress and is not a guarantee of execution. |
| Liquidation clusters | Large concentrations of leveraged positions near current prices can create cascading thresholds. | Public liquidation maps are estimates and may not include every venue. |
| Collateral quality | Risk rises when volatile, wrapped or yield-bearing tokens support large derivatives positions. | A token that usually tracks a reference value can still trade at a discount on one exchange. |
| Mark price versus index price | A widening gap can reveal exchange-specific pricing stress and liquidation risk. | The relevant mark-price formula differs by platform and may change. |
| Cross-venue price differences | Large gaps can signal delayed arbitrage, fragmented liquidity or a venue-specific problem. | A price on one exchange may not represent the broader market, even though it may control that exchange’s liquidations. |
| Exchange performance | Latency, outages, withdrawal delays and degraded risk systems can prevent traders from managing positions. | Good platform performance does not eliminate market or counterparty risk. |
| Weekend and holiday liquidity | Reduced market-maker participation can magnify an unexpected headline. | Thin liquidity can produce false signals as well as genuine stress. |
| Implied volatility | A sudden rise indicates that options traders are pricing more uncertainty. | Volatility is a measure of expected movement, not a directional forecast. |
What the event means for different crypto holders
The consequences depended heavily on how a person was positioned. The same Bitcoin price move could be inconvenient for a spot holder and account-ending for a highly leveraged futures trader.
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| Position type | What generally happens in a sharp decline | Key risk |
|---|---|---|
| Unleveraged spot | The holding loses market value but is not automatically liquidated. | The loss is generally unrealized until the asset is sold, but the price may not recover. |
| Leveraged futures or perpetuals | The exchange can forcibly close the position when collateral falls below maintenance margin. | High leverage leaves little room for an ordinary adverse move. |
| Cross-margin account | Collateral is shared across positions. | Losses in one trade can consume collateral supporting other trades. |
| Isolated-margin account | Risk is assigned to a particular position. | The isolated position can still be forcibly closed, but losses are more compartmentalized. |
| Stop-loss order | The order may activate during a decline. | In a gap or liquidity vacuum, execution can be substantially worse than the stop price. |
| Stablecoin or wrapped-token collateral | The collateral may be marked down or trade below its intended reference value on a specific venue. | Design intent does not guarantee a one-dollar price or uniform liquidity everywhere. |
| Centralized-exchange user | The venue may offer deep liquidity and an automated risk system. | The user also faces platform rules, oracle choices, outages and counterparty risk. |
| Decentralized-venue user | On-chain positions and prices may be more transparent. | Liquidity can be thinner, slippage higher and liquidation rules protocol-specific. |
For personal-finance purposes, the central lesson is not that one token was permanently invalidated. It is that leverage turns volatility into a mechanical account risk. A trader can be directionally correct over the long term and still lose the entire margin balance during a short-lived price dislocation.
What the October crash does—and does not—prove
- It does prove that a political headline can rapidly reprice crypto when the market is heavily leveraged.
- It does prove that Bitcoin, Ether and major altcoins can become highly correlated during forced deleveraging.
- It does show that exchange-specific mark prices and collateral rules can materially affect customer outcomes.
- It does not prove that Trump alone caused the full reported loss figure.
- It does not prove that Binance alone caused the global cascade.
- It does not prove that large pre-announcement shorts were insider trades.
- It does not establish that another crash is certain.
- It does not make the $350 billion–$500 billion market-cap estimate equivalent to cash lost by investors.
Practical checklist before using leverage
- Confirm whether the position is spot, futures or a perpetual contract.
- Read the platform’s liquidation, maintenance-margin, mark-price and insurance-fund rules.
- Determine whether the account uses cross margin or isolated margin.
- Check what asset serves as collateral and whether it can trade below its reference value.
- Review open interest, funding and futures basis, but treat them as context rather than predictions.
- Check order-book depth and cross-exchange prices during the hours in which you plan to hold risk.
- Assume a stop order may execute at a worse price during a liquidity vacuum.
- Keep enough liquidity outside the trading account for ordinary financial obligations.
- Consider whether a weekend or holiday headline could leave fewer market makers available.
- Do not assume that a temporary rebound will restore a liquidated position. Once an exchange closes it, the position is gone unless the platform’s specific remediation process applies.
These steps do not eliminate market risk. They help distinguish a thesis about an asset from a bet on whether an exchange’s liquidation engine will close the position first.
Source and measurement notes
The original headline associated with this story appeared in Forbes. This article updates the framing by adding the October 2025 date, separating market-cap estimates from liquidations and incorporating later analysis of exchange mechanics.
Reported prices and liquidation totals vary because providers use different exchanges, time windows and definitions. CoinGlass-related reporting, CoinGecko, Amberdata, CoinDesk, Kaiko, the BIS and ESMA should therefore be read as complementary evidence rather than as one synchronized ledger. The biggest numbers are best described as reported totals or estimates, not as a final audited count.
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What exactly triggered the October 2025 crypto crash?
The immediate catalyst was President Trump’s October 10, 2025 announcement of an additional 100% tariff on Chinese imports, beginning November 1 or sooner, together with proposed controls on critical software exports. The announcement followed China’s October 9 rare-earth export-control measures. Excessive leverage, thin liquidity and automated liquidations then amplified the initial risk-off move.
Did $19 billion in crypto actually disappear?
No. The approximately $19 billion figure refers primarily to the reported notional value of leveraged positions forcibly liquidated. It is not the same as $19 billion in cash leaving investor bank accounts. Traders’ realized losses, the estimated decline in total market capitalization and unleveraged holders’ paper losses are separate measurements.
Did Binance or USDe cause the crash?
Binance-specific pricing and collateral problems appear to have worsened losses for some customers. USDe briefly traded near $0.64–$0.65 on Binance while broader index rates remained much higher, and BNSOL and WBETH also experienced dislocations. However, the macro shock and broad leverage imbalance were already present. Public evidence does not establish that Binance alone caused the global cascade.
Can another crypto liquidation cascade happen?
It is possible, but no indicator can predict one with certainty. Risk is generally greater when derivatives open interest and leverage are high, funding is crowded, order-book depth is thin, collateral is volatile or venue-specific prices diverge from broader indexes. These are vulnerability indicators, not reliable timing signals.
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Large short positions reportedly appeared before the announcement, prompting speculation. But public evidence does not establish the traders’ identities, advance knowledge, coordination or misconduct. A short can also be a hedge rather than a bet based on privileged information.
The Bottom Line
Bottom line: Trump’s China tariff announcement triggered the October 10–11, 2025 crypto selloff, but it did not by itself create the reported $19 billion liquidation wave. A crowded, highly leveraged market, thin weekend liquidity, automatic liquidation engines, correlated token selling and venue-specific collateral pricing turned a geopolitical shock into a flash-crash-style cascade. Binance’s USDe-related pricing dislocation may have amplified the damage, but the claim that Binance alone caused the crash remains unproven. For future risk assessment, watch leverage, liquidity, collateral quality and exchange mechanics—not just the headline that starts the selloff.
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