On October 10, 2025, the crypto market faced one of its most catastrophic days ever. What began as a normal Friday trading session spiraled into a $19 billion liquidation event within 24 hours, an unprecedented meltdown that erased leveraged positions across Bitcoin, Ethereum, and hundreds of altcoins. Analytics firm CoinGlass confirmed it as the largest crypto crash in history, impacting roughly 1.6 million traders worldwide.
At the height of the chaos, Bitcoin plunged below $110,000, Ethereum slipped under $3,900, and altcoins cratered by double digits. The total crypto market capitalization briefly fell to $3.87 trillion, a sharp reversal from the euphoric highs seen just days earlier.
This explained guide unpacks the chain of events: how the setup, trigger, and cascading liquidations unfolded, who was affected, how markets rebounded, and what lessons this event leaves for traders and institutions alike.
Precursors: A Market Primed for Volatility
Leading up to October 10, the mood across crypto was euphoric. Bitcoin had rallied past $120,000, buoyed by institutional inflows, bullish macro trends, and optimism around regulatory clarity. Ethereum hovered around $4,000, supported by strong layer-2 adoption and DeFi growth.
At the same time, traditional markets were flashing warning signs. The S&P 500 had surged 34% in six months, its tenth such occurrence since 1930, indicating an overextended risk-on environment. Beneath the surface, leverage across crypto derivatives reached dangerous levels.
On platforms like Binance, Bybit, and Hyperliquid, traders were using 10x or higher leverage on perpetual futures. open interest exceeded $50 billion, showing a crowded long-side imbalance. Analysts repeatedly warned of a “leverage flush,” where even a small dip could trigger widespread forced liquidations.
Geopolitical tension added fuel. U.S.-China relations were deteriorating amid tech-export disputes. Traders overlooked the risk of policy shocks, creating the perfect setup for a sudden, violent correction.
The Trigger: Trump’s 100% Tariff Shock
The spark came around midday on October 10 (the crypto crash day). President Donald Trump announced 100% tariffs on all Chinese imports and new restrictions on tech exports, citing unfair trade practices. The statement, broadcast live, sent shockwaves through global markets, and crypto crashed.
Equities sank immediately: the Dow Jones and Nasdaq both dipped sharply. Oil prices tumbled, gold surged, and in crypto, the most liquid, 24/7 market, the crash was instant.
Bitcoin fell over 10%, dropping below $110,000 within hours.
Ethereum slid to $3,844, while Solana and XRP lost 15–20%.
Why did tariffs trigger such chaos? Crypto behaves like a risk-on asset, often mirroring tech sentiment. With China deeply embedded in mining, hardware manufacturing, and token holdings, tariffs signaled potential disruption to crypto’s global supply chains and investor confidence.
As CNN summarized: “Trump’s 100% tariff threat sparked a massive cryptocurrency sell-off one of the largest single-day reactions in the market’s history.”
The Cascade: How $19 Billion Vanished in Hours
Once the sell-off began, leveraged positions unraveled rapidly. On-chain and exchange data revealed the chain reaction in brutal detail.
Hyperliquid, a decentralized exchange, saw $1.23 billion in trader losses and more than 6,300 accounts wiped out. One position alone lost $200 million on an ETH-USDT pair.
Binance and Bybit reported system slowdowns from extreme trading volume, with Binance refunding users $280 million for liquidation issues.
Across all platforms, $16.7 billion of the total $19 billion came from long positions, amplifying the downside spiral.
When leveraged longs fall below maintenance margin, exchanges automatically liquidate positions, selling assets to cover loans. This process compounds price drops, triggering further liquidations in a self-reinforcing feedback loop.
For context, the FTX collapse in 2022 saw $1.6 billion liquidated, and the COVID crash in 2020 reached $1.2 billion. The October 10, 2025 event eclipsed both, cementing its place as crypto’s largest liquidation ever.
Impact on Traders, Exchanges, and Ecosystems
The human toll was staggering. After the 10th October crypto crash, more than 1.6 million traders were liquidated, some losing entire life savings. On X, “I survived the $19B liquidation” became a rallying cry among shell-shocked investors. One Hyperliquid trader reportedly lost their entire $19 million balance in a single trade.
Exchanges also faced heavy scrutiny. Hyperliquid’s leaderboard showed 205 traders losing over $1 million each. Binance’s CEO pledged a review of infrastructure failures that caused delayed order executions.
Even DeFi felt the tremors. Stablecoin mechanisms like Ethena’s USDe briefly depegged to $0.9996, while on-chain ETFs recorded sharp outflows—Bitcoin ETFs lost $4.5 million, Ethereum $174,000 the same day.
Market makers and lending desks were squeezed hardest. Liquidity dried up, and lenders recalled credit lines. As journalist Laura Shin noted, “After the $19B liquidation, smaller market makers could be wiped out entirely.”
The Recovery: From Bloodbath to Bounce
By the next day, optimism cautiously returned. Bitcoin rebounded to $113,000, Ethereum stabilized around $3,840, and overall market cap regained 4.4%, climbing back above $4 trillion.
Weekend statements from Trump and Vice President JD Vance softened tariff rhetoric “Don’t worry about China, everything will be alright!” Trump posted on Truth Social. The tone shift calmed broader markets and revived sentiment.
BNB led recovery, rallying 15% to $1,355 amid strong DeFi activity.
97 of the top 100 coins posted green candles by October 13.
Analysts saw the event as a healthy purge of excess leverage. “We absorbed a $19B liquidation and bounced hard. The weak hands got flushed,” one market analyst posted.
Still, caution lingered, some expected 20–50% corrections in altcoins as traders took profits from the rebound.
Analysis: Lessons from the Largest Liquidation in History
The October 10 crash exposed structural weaknesses in crypto markets: excessive leverage, thin liquidity, and sensitivity to macro shocks.
Experts described it as a “market structure event” rather than a fraud or hack. A real-world policy announcement collided with unsustainable leverage levels, forcing massive deleveraging.
On-chain data later revealed several whales moving capital into shorts before the event, including a $1.1 billion short position opened using $30 million in USDC collateral. However, analysts largely dismissed conspiracy theories of coordinated manipulation.
Compared with any past crypto crash, from FTX to Terra, the October 10 event was both cleaner and faster. The $19 billion in liquidations wasn’t “money lost” but rather wealth transferred from leveraged longs to shorts, a redistribution that reset market leverage to safer levels.
Post-event sentiment quickly turned optimistic. Historical precedent shows that deep leverage flushes often precede bull runs, as weaker positions exit and long-term holders accumulate.
Great Crypto Liquidation — FAQs (Oct 10, 2025)
What happened on October 10, 2025?
Crypto suffered its largest liquidation ever: about $19B wiped in 24 hours across ~1.6M traders. BTC dipped below $110K and ETH under $3.9K, dragging most altcoins lower.
What triggered the crash?
A sudden macro shock: President Trump’s 100% tariff announcement on all Chinese imports. With leverage at extremes, the sell-off cascaded into forced liquidations across major venues.
Which platforms and markets were hit hardest?
Derivatives venues like Binance, Bybit, and Hyperliquid saw heavy long wipeouts and system slowdowns. DeFi felt spillovers: some stablecoins briefly depegged and on-chain ETF flows turned negative during peak stress.
How quickly did markets recover?
Within 48 hours, majors bounced. BTC reclaimed ~$113K, BNB +15% to ~$1,355, Solana back above $200, and 97/100 top coins printed green—helped by softer follow-up rhetoric on tariffs.
What are the key lessons for traders and protocols?
It was a leverage purge, not a structural fraud event. Takeaways: manage position sizing, avoid crowded longs, expect macro shocks to hit crypto first, and use circuit breakers/risk controls. Historically, deep flushes often reset conditions for healthier uptrends.
