The 2025 Crypto Crash: A Turning Point

What Went Down — The Trigger & Timeline

  • On October 10, 2025, the crypto market was hit by a sudden and historic crash. Over a short period, many top coins plunged, triggering a cascade of forced liquidations. 
  • The immediate spark: Donald Trump’s surprise announcement of 100% tariffs on Chinese tech exports, along with stricter export controls on critical software, shocked global markets. 
  • Because crypto markets operate 24/7 and are highly leveraged, the shock rippled instantly. With many trades on margin/perpetuals, the drop became self-reinforcing. 
  • In just 24 hours, more than $19 billion in leveraged positions were liquidated — the largest single-day crypto wipeout ever recorded. 
  • Roughly 1.6 million traders lost positions during this collapse. 
  • The broader crypto market cap also shrank dramatically: estimates suggest over $560 billion (≈ 13%) was erased in value over the span of a day or slightly more. 


Crypto Crash 2025 Update Tariffs


💧 Liquidity & Market Health: What It Looks Like in a Crash

  • Total Liquidity & Market Cap: As prices collapse, many assets lose value simultaneously. That means the money “in” the system shrinks. Buyers pull back, and few are willing to step in at lower levels.
  • Drying liquidity: In crises, bid-ask spreads widen, depth dries up, and trades move prices violently.
  • Locked / eaten liquidity: Some positions get liquidated or margin-called, and funds are taken out of circulation. Others may be “locked” in smart  withheld by exchanges during volatile periods.
  • Systemic risk exposure: Because many participants use leverage, the risk is amplified. A moderate drop can cascade into mass liquidations when multiple stop-losses trigger.
  • In 2025, these dynamics were on full display. The initial drop led to more drops, which triggered more forced selling, and so on. 

😟 Famous (or Tragic) Losses of 2025

  • Konstantin Galish (Ukraine): The crypto investor/influencer was found dead in his Lamborghini in Kyiv amid the crash. Local reports claim he lost at least $30 million or more during the market slide, which may have contributed to his tragic decision. 
  • $LIBRA scandal (Argentina): In February 2025, Argentina’s president Javier Milei promoted a memecoin called $LIBRA. The coin’s value spiked, then collapsed rapidly when the founders dumped their holdings. Investors lost around $251 million in a matter of hours.
  • Bybit exchange hack: In February 2025, Bybit suffered a massive security breach. About 400,000 ETH (≈ $1.4 billion) was stolen, reportedly via a compromised third-party wallet system. 
  • Slow Liquidity Drain (SLID) scams: Researchers found that in 2025, multiple DeFi liquidity pools were draining funds slowly (not via obvious rug pulls). Over $103 million of losses were attributed to these stealthy scams across many pools. 

🧠 Lessons from 2025’s Crypto Meltdown

  1. Leverage is a double-edged sword
    It can magnify gains — but in crashes, it magnifies losses. Many traders overestimate their buffer.

  2. Don’t rely solely on hype or political momentum
    Even a powerful narrative (e.g. pro-crypto sentiment) can vanish quickly under external shocks (e.g. tariffs, regulations, macro risks).

  3. Security and custodians matter
    Hacks still happen. Exchanges’ internal systems and third-party integrations can be weak points (Bybit case).

  4. Be wary of hidden or slow scams
    Some protocols drain liquidity gradually. These are harder to spot but can be very damaging.

  5. Diversification & risk controls
    Never put everything into one coin or one protocol. Use stop-losses, maintain capital reserves, and avoid all-in bets.

  6. Understand the macro & politics
    Crypto doesn’t live in a bubble. Trade wars, regulation, global instability affect it strongly.