Cryptocurrencies experienced a sharp flash crash over the weekend following President Donald Trump's threats of new tariffs on Chinese imports, erasing billions in market value. Bitcoin dropped from highs near $126,000 to below $105,000, while other assets like Ethereum and Dogecoin saw even steeper declines. The event highlighted the sector's volatility amid leveraged trading and global trade tensions.
The cryptocurrency market tumbled on Friday, October 13, 2025, after President Trump announced threats of 100% tariffs on imports from China, sparking a risk-off sell-off. Investors fled to safe havens like gold and Treasury bonds, with the tech-heavy Nasdaq Composite falling 3.56% and the S&P 500 marking its worst day since April. Bitcoin, the largest cryptocurrency, fell from roughly $122,500 to a low of $104,600 on Friday afternoon, before dipping further to around $107,000 by Saturday. Ethereum plunged roughly 21% in some reports, or nearly 11% to $3,878 in others, later recovering above $4,100. Altcoins faced heavier losses: Dogecoin dropped more than 50%, Solana and Cardano up to 30%, and an altcoin index as much as 40% in minutes.
The crash liquidated a record $19 billion in positions, affecting about 1.6 million traders, according to CoinGlass and The Kobeissi Letter data. Overall market losses reached approximately $500 billion, with $20 billion in immediate wipeouts noted. Highly leveraged bets amplified the downturn, leading to automatic closures by exchanges. "The aggressive crypto selloff was sparked by a risk-off stampede," said Lukman Otunuga, senior market analyst at FXTM. "Friday’s move was a textbook example of how leverage can amplify short-term volatility," added Samir Kerbage, CIO at Hashdex.
Speculation arose over potential insider trading after an anonymous account shorted Bitcoin 30 minutes before the crash, reportedly netting $88 million in profits, though allegations remain unsubstantiated. Binance reported brief technical glitches, including a stablecoin de-pegging from the US dollar. By Monday, Bitcoin stabilized around $115,000, below its October 6 record high of $126,272, with market capitalization at about $2.3 trillion. "The bloodbath... is a brutal reminder that... the risks are amplified," warned Nic Puckrin of The Coin Bureau, noting that the event cleared excessive leverage but left uncertainty amid geopolitical tensions. Despite partial rebounds, experts caution on ongoing volatility in this 24/7 market.