On October 10, 2025, the crypto market experienced what many are calling the largest single-day liquidation event in the history of the industry.

Here are the highlights:

• Approximately $19B of leveraged positions were liquidated across major crypto platforms within 24 hours.
• More than 1.6 million traders were affected (accounts forcibly closed).

The trigger: A surprise macro-shock from the announcement of 100% tariffs on Chinese imports by Donald Trump, which flushed out risk assets, including crypto.

The effect: Big fall in major coins, especially altcoins. For instance:

• Bitcoin fell about 10-14% from its highs.
• Ethereum and alt tokens were hit even harder: altcoins crashed 30-50% in just 25 minutes in some cases.

This wasn’t just a “normal pull-back”, the scale of the leveraged-trade wipe-out was an order of magnitude larger than prior big events.

Why Leverage Made Everything Worse

Leverage was the main reason the crash got so bad. In crypto, leverage lets traders borrow money to make bigger bets than they could with their own funds. When the market was going up, a lot of people used more and more leverage, thinking prices would keep rising.

By early October, borrowing levels were very high. Traders were taking huge positions, and many weren’t paying much attention to risk. So when prices started to fall, those borrowed trades began to collapse.

Exchanges automatically sold traders’ positions to cover their losses, which pushed prices even lower. That caused even more forced selling, a chain reaction that fed on itself.

In just a few hours, billions of dollars disappeared. For long-time crypto traders, it was a familiar story: leverage builds quietly during good times, and when something finally goes wrong, the whole system unwinds fast.

But this crash was different in size. Analysts say it was the biggest single-day wipeout of leveraged positions in crypto’s history, even worse than what happened during the FTX collapse or the big sell-off in May 2021

Looking Forward

There are important lessons here, especially for those who trade with borrowed money. Leverage can be intoxicating, it magnifies gains during bull markets and makes small moves feel like windfalls. But it also magnifies losses, and when the market turns against you, it rarely gives time to react.

Crypto is already among the most volatile asset classes in existence; layering leverage on top of that volatility is like stacking dynamite on a fault line.

The Oct 10 liquidation event also shatters the myth that crypto is immune to broader macroeconomic forces. The tariff announcement was a traditional geopolitical headline, not a crypto-specific development. Yet it triggered one of the worst sell-offs in digital asset history.

That’s a sobering reminder that, in 2025, crypto no longer trades in isolation, it moves alongside global liquidity, policy shifts, and investor sentiment just like any other risk asset.