On October 10, 2025, President Donald Trump announced a 100% tariff on Chinese imports, effective November 1, 2025, in response to Beijing’s rare earth export controls, escalating U.S.-China trade tensions, per CoinDesk. This sparked the largest single-day crypto crash in history, liquidating over $19B in leveraged positions across 1.66M traders within 24 hours, per CoinGlass data cited in CaptainAltcoin. The total market cap plunged 9.66% to $2.1T, erasing $200B, per BeInCrypto. Bitcoin (BTC) tumbled 12% below $110,000, while Ethereum (ETH) crashed 16% below $3,700, per. Altcoins like Solana (SOL) and XRP fell 20-30%, per FXStreet.
Centralized exchanges (CEXs) like Binance and Hyperliquid drove the carnage, with $10B in long positions liquidated, per Coinpedia. BTC led with $1.83B losses, followed by ETH ($1.68B), SOL ($614M), and XRP ($432M), per TheStreet Crypto. Arthur Hayes, BitMEX co-founder, blamed auto-liquidations of cross-margined collateral: “Big CEX’s auto liquidation of collateral tied to cross-margined positions is why lots of alts got smoked,” per his X post. This created a domino effect, forcing sales of low-liquidity altcoins, per CryptoSlate.
Hayes highlighted how altcoins used as collateral for leveraged bets triggered forced selling, per CaptainAltcoin. “Word on the street is that big CEX’s auto liquidation… is why lots of alts got smoked on the move down,” he posted on X, congratulating dip-buyers. CrediBULL Crypto agreed, explaining, “When leveraged positions backed by alts started to unwind, those assets had to be sold,” turning into a “domino effect” due to thin liquidity, per his X thread. The “wick lows” were mechanical, not organic, with spot holders largely spared, per.
The event, 10x larger than the FTX collapse ($1.9B) and 18x the COVID crash ($1B), cleared speculative froth, per CoinGlass. CrediBULL called it a “healthy reset,” noting, “If you managed to buy during the dip, you probably picked up some high-quality coins at prices we won’t see again,” per. BTC stabilized near $110K (support at $105K), while ETH holds $3,700 (pivot at $3,500), per TradingView. Analysts like Peter Chung from Presto Research forecast a rebound if tariffs ease, targeting BTC at $120K by November, per. However, escalation could test $100K, per The Block.
The crash exposed leverage risks; spot holders endured better than leveraged traders, per Hayes. Track tariff updates on whitehouse.gov and liquidations via CoinGlass. Dollar-cost average into BTC or ETH below $105K and $3,500, with stop-losses at $100K and $3,200, or diversify into USDC, per Techopedia. Follow @TheBlock__ on X for real-time insights. While brutal, this “mechanical crash” may fuel a stronger bull run in 2026, per CrediBULL, but trade war risks linger.
