Global cryptocurrency markets suffered one of their sharpest declines of the year on Friday after US President Donald Trump escalated the trade war with China. Exchanges liquidated billions of dollars’ worth of leveraged positions as investors took fright.
Crypto Market Wipeout Sees $19bn Liquidated After Trump Threatens New Tariffs on China
12 October 2025 - 21:10 CEST
By Giles Broom
Trump said he would impose additional tariffs on Chinese imports, sparking a broad sell-off across risk assets and erasing $360 billion of value in a day from the crypto market. Bitcoin plummeted as much as 16 percent, briefly dropping as low as $103,000, before stabilizing near $111,000 by Saturday. Ether (ETH) lost almost $1,000 before recovering to about $3,800.
Sharp, unexpected price drops in crypto assets can spell trouble for traders who made long bets with borrowed funds as exchanges automatically dissolve the positions during a sell-off. Roughly $19 billion in leveraged crypto positions were liquidated within 24 hours, according to data from Coinglass, amid a market rout that also impacted equities, fixed income and other assets. Gold maintained daily highs above $4,000 reinforcing its longstanding safe-haven reputation.
100% China tariff
Trump declared in a Truth Social post on Friday that the US will impose a new 100% levy on China, “over and above any tariff that they are currently paying” by 1 Nov. He said the US will also impose export controls “on any and all critical software” and positioned the actions as retaliation for China’s own new export controls. From 1 Dec, foreign firms must have a licence to export products that contain more than 0.1% of rare earths source from China or manufactured with Chinese support, the country's Ministry of Commerce said.
US Treasuries rose, depressing yields, while the dollar slipped against other currencies. The S&P500 Index of US stocks declined 2.7%.
Liquidations
In the crypto market, the $19 billion of liquidated positions reflects the notional value of leveraged trades automatically closed by exchanges, rather than direct market value lost, and was mainly attributed to long positions. The scale of the carnage was about 20 times larger than the March 2020 COVID-era crash, when just over $1 billion in leverage was erased.
Open interest declined nearly 20%, from around $127 billion to $102 billion, and funding rates turned negative amid the highest trading volumes since early 2024.
Major altcoins faced even sharper losses than Bitcoin. XRP and Solana (SOL) both shed about 15 percent on Friday while Cardano (ADA) plunged 22 percent, driving the Altcoin Season Index down to 33.
ETF outflows
Institutional investors responded by withdrawing from ETFs (exchange traded funds). Spot crypto ETFs recorded $179.4 million in redemptions, ending a five-day inflow streak and marking the sharpest daily outflow since July, according to Farside Investors. Total crypto ETF assets under management have fallen by roughly $3.6 bn since early October.
While crypto assets did partially erase losses over the weekend market sentiment remained risk-averse with the Fear & Greed Index at 31/100. Social-media mentions of “liquidation” and “tariff” jumped 45% over 48 hours, reflecting growing anxiety across retail and derivatives traders, according to Santiment.
What next?
The next cues for market direction are likely to come from updates in the US–China trade spat and forthcoming US Federal Reserve commentary. Traders will also be looking out for US inflation data, postponed by the Bureau of Labor Statistics to 24 Oct, and considering how the information may influence the Fed’s rate-cutting plans. Futures markets now price a 98% probability of an October rate cut, according to CME’s FedWatch tool.
