US President Donald Trump's surprise announcement of 100% tariffs on Chinese imports triggered the largest single-day liquidation event in cryptocurrency history, wiping out nearly $19 billion in positions. Bitcoin plunged from a record high of $126,000 to below $107,000, while altcoins suffered steeper declines amid a cascade of leveraged trades. Markets partially recovered over the weekend as tensions eased with calming statements from both sides.
The crypto market meltdown began on October 10, 2025, when President Trump posted on social media accusing China of an 'extraordinarily aggressive position' on trade, announcing 100% tariffs on Chinese goods and export controls on critical software effective November 1. This followed China's Thursday announcement of new export controls on rare earth elements and critical minerals used in technology manufacturing.
Within an hour of the tariff reveal, Bitcoin dropped 13% from $123,000 to under $107,000, according to data from Derive.xyz and Coinglass. Ethereum fell over 12% to $3,500, Solana 17% to around $160, and smaller tokens like Hyperliquid and Sui saw drops of 45% and 70%, respectively. The flash crash led to $7 billion in liquidations in one hour, with $5.5 billion from long positions, totaling $9.6 billion over 24 hours—later revised to nearly $19 billion across centralized and decentralized exchanges, marking the biggest wipeout since the FTX collapse.
'A flash crash of liquidations saw almost $7 billion wiped across all markets within one hour,' said Sean Dawson, head of research at Derive.xyz. The downturn erased $500 billion from the total crypto market cap, fueled by a leverage boom where open interest on Bitcoin and Ethereum had surged 374% and more than doubled year-to-date.
Claims of insider trading emerged after an anonymous trader reportedly opened short positions on Bitcoin and Ether 30 minutes before the announcement, profiting up to $200 million. Joshua de Vos of CoinDesk noted, 'The timing and scale... does raise suspicion of information asymmetry,' though no evidence confirms wrongdoing.
Over the weekend, recovery signs appeared. China's Ministry of Commerce clarified its controls would have 'minimal impact' and issue licenses, while Vice President JD Vance expressed willingness for dialogue. Trump posted on Truth Social: 'Don't worry about China, it will be all fine! The U.S.A wants to help China, not hurt it.' Bitcoin rebounded 3% to $114,000-$115,000 by Sunday, with Ethereum, Solana, and Dogecoin gaining 6%-8%. Analysts like Markus Thielen of 10x Research called the setup 'chaotic—and full of opportunity,' amid broader macro concerns including oil prices below $60 and potential stock market corrections.
Bitcoin showed relative resilience, dropping only 4% overall, compared to XRP's 36.8% and Dogecoin's 31.6%, highlighting differences in market character during stress.