**Historic $19 Billion Crypto Liquidation Rocks Markets Over Weekend of October 10-11, 2025**

Over the weekend of October 10-11, 2025, the cryptocurrency market faced its biggest liquidation event in history. Approximately US$19 billion worth of leveraged trading positions were wiped out within just 24 hours, impacting over 1.6 million traders worldwide.

To put this into perspective, this crash ranks alongside previous infamous events such as the COVID-19 market crash of March 2020 and the FTX collapse. This is a significant moment in crypto history — one that we’ll still be discussing years from now. So, let’s unpack what happened over that turbulent weekend so you can keep up with your crypto mates.

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### What Does Liquidation Mean?

Before diving deeper, it’s important to note that in the UK, leverage tied to cryptoassets is not permitted. This explanation focuses on what traders abroad—particularly in the USA—are doing that affects Bitcoin’s price globally.

Imagine a USA-based investor wants to buy Bitcoin because they believe its price will rise. They have $100 of their own money but seek to buy more Bitcoin than that would normally allow. They use a crypto trading platform offering loans and borrow $900 more, enabling them to purchase $1,000 worth of Bitcoin. This is called **10x leverage** — controlling ten times more money than they actually own.

The platform agrees, but with a crucial condition:
*“If Bitcoin’s price starts dropping, we’ll automatically sell the investor’s Bitcoin before losses get too large.”*

When things go wrong and Bitcoin’s price drops by 10%, the investor’s $1,000 position is now worth only $900. Since they borrowed $900 and only had $100 of their own money, they have lost everything they invested.

The platform steps in and says:
*“We need to protect our $900. We’re selling your position right now.”*

This forced automatic sale is called a **liquidation**.

**The Result:**
– The investor loses their entire $100 — it’s completely gone.
– The platform recovers their $900 by selling the investor’s position.
– Typically, the platform doesn’t lose money.

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### The Chain Reaction

Now, imagine millions of traders in similar situations with billions of dollars at stake. When the market starts dropping, it triggers a devastating chain reaction:
1. Prices begin to fall.
2. Thousands of leveraged positions hit their liquidation thresholds.
3. Platforms automatically sell assets to recover loans.
4. This massive selling pushes prices down even further.
5. More liquidations get triggered.
6. The cycle keeps snowballing downhill.

Unfortunately, the severity of such a crash means some traders can lose everything — sometimes even ending up “moving in with their weird uncle” after suffering total losses.

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### What Triggered This Crash?

The immediate catalyst was geopolitical. On October 10, 2025, President Trump announced 100% tariffs on Chinese imports effective November 1, 2025, alongside export controls on critical software.

Although cryptocurrency is often considered independent of traditional finance, it behaves similarly to a high-risk tech investment. When Trump announced these massive tariffs, investors feared an escalating US-China economic conflict.

As a result:
– Investors sold risky assets such as stocks and crypto.
– They moved toward safer havens like cash, gold, and bonds.
– Crypto prices plunged sharply.
– Leveraged traders began getting liquidated.
– Liquidations accelerated price drops even more.

Markets inherently dislike uncertainty, and a trade war between the world’s two largest economies creates enormous doubt about global economic growth — exacerbating the crypto crash.

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### The Scale of Destruction

– **Total liquidations:** Over US$19 billion in 24 hours
– **Traders affected:** 1,618,240 people
– **Long positions liquidated:** US$16.7 billion (bets on prices going up)
– **Bitcoin liquidations:** US$1.37 billion
– **Ethereum liquidations:** US$1.26 billion
– **Largest single trade wiped out:** US$87.53 million on one Bitcoin trade

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### How Leverage Works When Things Go Right

Leverage can amplify profits — here’s a winning example for a USA-based trader:

– Using $100 of their own money and borrowing $900 (10x leverage), they buy $1,000 worth of Bitcoin.
– If Bitcoin rises 10%, their position grows to $1,100.
– After repaying the $900 loan (plus small fees), they keep $200 — doubling their initial $100 investment.

A small move in price can lead to enormous gains.

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### Leverage When Things Go Wrong

But leverage cuts both ways. The more leverage you use, the faster you can get liquidated:

| Leverage | Own Money | Borrowed | Total Position | Price Drop to Liquidation | Result |
|———-|———–|———-|—————-|————————–|———————————|
| 10x | $100 | $900 | $1,000 | 10% | Lose entire $100, position liquidated |
| 5x | $100 | $400 | $500 | 20% | Lose entire $100, position liquidated |
| 2x | $100 | $100 | $200 | 50% | Lose entire $100, position liquidated |

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### Who Actually Loses Money?

The trader who uses leverage loses their entire collateral — the money they put in. Most of the time, that’s the only party losing real money.

Exchanges and lending platforms generally don’t lose money because they automatically liquidate positions before losses exceed collateral. They also maintain insurance funds for extreme cases, such as rapid price crashes where selling speed can’t keep up. However, these situations are rare.

The system prioritizes protecting the lender over the trader.

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### Where We Are Now

Just days before this crash, Bitcoin had been soaring, pushing past $125,000 and setting new all-time highs. The rally was fueled by strong institutional investment through ETFs in the USA and rising concerns about traditional currency devaluation.

As of Monday morning, October 13, 2025:
– Bitcoin is trading around $115,000.
– Ethereum has recovered from approximately $3,400 to about $4,100.

The market is catching its breath after the violent weekend selloff.

If confidence returns, traders may see current prices as a buying opportunity. But if bad news or trade tensions escalate, selling could continue.

There could be sideways movement or a period of relative stability as the market digests recent news. Of course, with crypto’s famous volatility, anything can happen.

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### What We Have Learned

For those new to crypto volatility, this weekend taught us several key lessons:

– **Leverage trading lets traders control far more money than they actually own, but it’s extremely risky.**
– There’s potential for high rewards, but equally high risks — you have to ask yourself how much risk you can live with (or how comfortable you’d be moving in with your weird uncle).
– Even a small price drop can wipe out an entire leveraged investment.
– Despite claims of independence, crypto behaves very much like a high-risk asset tied to traditional market sentiments.
– Leverage trading is like flooring the accelerator pedal in an electric vehicle: you can take off fast, but one wrong move might mean costly crash repairs.
– What traders do overseas, especially USA-based leveraged traders, influences crypto prices worldwide — affecting all traders, even those in countries like the UK where leveraged crypto trading is banned.

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**Stay informed, trade carefully, and always understand the risks before using leverage in cryptocurrency markets.**
https://blog.coinjar.com/weekend-crypto-meltdown-what-happened-and-why-2/