Bitcoin plunged below $110,000 on October 10, 2025, as US-China trade tensions triggered the largest single-day liquidation in crypto history. Over $19 billion in leveraged bets were wiped out, affecting 1.6 million traders. The event severed bitcoin's link to gold, making it behave like risk assets.
The crypto market experienced a severe downturn over the weekend of October 10-11, 2025, sparked by escalating US-China trade disputes. Beijing imposed new restrictions on rare-earth minerals exports, prompting President Donald Trump to threaten a 100% tariff on China. This reignited trade war fears, leading to a sell-off that began on Friday.
Bitcoin, which had been rising alongside gold in a debasement trade, diverged from the safe-haven asset and followed stocks lower. The cryptocurrency briefly sank below $110,000, while altcoins like ethereum and solana saw double-digit declines. Lesser-known coins lost up to 80% of their value. According to Coinglass, more than $19 billion in leveraged positions were liquidated in a 24-hour period ending Saturday evening, impacting 1.6 million traders; the firm described its estimate as conservative, with the actual total likely higher.
"The concerns over an increase in tariffs were undeniably the catalyst," said Sean Farrell, head of digital assets at Fundstrat, in a Monday report. The rout was exacerbated by crypto's operational quirks, including lower liquidity outside US stock market hours, which amplified selling pressure. Price dislocations occurred, such as solana trading $20 lower on Binance than on Coinbase. Most liquidations happened on platforms like Hyperliquid, Bybit, and Binance.
By Tuesday, some recovery was underway, with bitcoin climbing back above $112,000. However, crypto-linked stocks including MicroStrategy (MSTR), Coinbase (COIN), Circle (CRCL), and Robinhood (HOOD) were trading lower. BlackRock CEO Larry Fink defended bitcoin's portfolio role in a CBS interview, stating, "There is a role for crypto in the same way there is a role for gold."
The flash crash highlights vulnerabilities in the crypto market to geopolitical events and leveraged trading.