The crypto market is poised for a potential rally after the recent crash triggered by Donald Trump's 100% tariff announcement on Chinese imports. Key factors include the largest liquidation event in market history and excessive leverage compounding losses.
Crypto markets faced a sharp decline on October 10‑11, 2025, triggered by former U.S. President Donald Trump's declaration of a 100% tariff on all Chinese imports.
The event showcases the vulnerability of crypto assets to geopolitical decisions, resulting in widespread market panic and sizable liquidity losses.
The announcement of tariffs by Donald Trump led to a crypto market meltdown. Within 24 hours, $400 billion in value vanished, affecting key cryptocurrencies like Bitcoin and Ethereum. Experts noted the unprecedented scale of liquidations.
Joshua Duckett of Chainlytics stated,
"The crypto market reacted in a more extreme way than the stock market because it's 24/7."
His remarks highlighted how economic news swiftly impacts crypto trading.
The immediate consequences included a drastic fall in Bitcoin's price, which plummeted from above $122,000 to below $103,000. Ethereum lost over 20 % in value. Analysts pointed to excessive leverage as a compounding factor.
The fallout affected institutional investors and individual traders alike. Over 1.5 million traders were liquidated, with positions worth $9.55 billion closed. The situation invoked cautious monitoring by institutions like the Bank of England.
Historically, crypto markets have faced similar downturns during global crises. However, analysts pointed out that the link between geopolitical trade moves and crypto is becoming increasingly pronounced, suggesting a shift towards treating cryptocurrencies as risk assets. As Santiment noted,
"Bitcoin, whether we like it or not, is behaving more like a risk asset than a safe haven during times of country tensions."
Regulatory bodies like the SEC and CFTC have yet to comment formally. Analysts and exchange leaders continue analyzing data to support possible risk mitigation strategies moving forward.