🧩 What really happened: The $20 billion crypto meltdown

It all started with one announcement.

U.S. President Donald Trump announced a 100% tariff on all imports from China, escalating what he called “a reclaiming of trade equity.” In minutes, the S&P 500 cratered by 2% and Bitcoin plunged from $125,000 to $104,000 in a matter of seconds, it took down over $1 trillion in crypto market cap in under three hours.

The Cascade

The rout had led to $9.55 billion worth of open-interest wipeouts and 1.5 million liquidations, CoinGlass data showed, the biggest such course in trading history. Longs were the major contributor of $8 billion in losses, with BTC and ETH accounting for just over $1.37 billion and 1.26 billion liquidations respectively.

As traders ran for their lives, one whale is said to have made $190-200 million shorting Bitcoin and Ethereum on Hyperliquid minutes before the meltdown. The timing led to talk of “engineered liquidations” and insider coordination across exchanges.

Arthur Hayes wrote on X:

The Suspicions

Some blamed centralized exchanges after numerous altcoins briefly displayed $0 on Binance. The exchange later attributed a display glitch involving decimal updates but still reimbursed users $283 million following the chaos.

As Binance Earn assets such as Ethena’s USDe briefly depegged to $0.66, concerns of a systemic exploit grew. Binance rejected an external attack but pledged new protections and soft price floors for synthetic assets.

The Rebound

In a panic, Tether and Circle issued $1.75 billion of new stablecoins, an infusion of liquidity as traders sought safety in dollars. On-chain trackers were also quick to point towards Bitmine picking up huge amounts of over 27,000 ETH ($104M) during the crash in a show of quiet confidence according to some analysts.

A positive tweet by President Donald Trump made the market feel the tariffs would not be implemented after all:

There were signs that the market was beginning to claw back some of what it lost by Monday. Bitcoin gained ~3% and consolidated around $115,342 following its nosedive to near the $105,000 level.

Ethereum shot higher by ~9% in a move back toward $4,180 from where it dropped toward $3,500.

Institutional buyers appear to have swooped in during the turmoil. On-chain indicators pointed toward US-based buying spikes, the Coinbase Premium Index hit 19-month highs during the crash, indicating buyers were entering at a discount.

In the meanwhile, market cap of the broader crypto market dropped from ~$4.14T to $3.65T during the dump and on its way up to 3.92T, somewhat in-sync with BTC’s rebound above $116k.

This bounce serves as an indication of the market’s reaction timing: over-leveraged positions out, liquidity in (stablecoins minting) and smart money entering, yet a fragile road lies ahead.

The Takeaway

From Washington’s double-edged trade wars to automatic liquidation spirals, the October 10 crash laid bare crypto’s reflexes under macro stress and its capacity to reset quickly.

If it was a purge, as some traders posit, it could be the sort of one that clears the runway for the next leg up.

BNB defies the crash. New ATH

While most of the market bled, BNB Coin flipped the script. The token surged 11% in a day, extending a 46% monthly gain and now up 135% year-on-year, reclaiming its $1,350 all-time high after dipping to $860 during last week’s liquidation wipeout.

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