The Real Reason Crypto Crashed Last Week

What the Tariff Hammer Means for Crypto Prices This Year

I’ve been covering crypto since 2016. And over the past decade, I’ve seen some massive drawdowns.

• I lived through the brutal 2018-19 Crypto Winter, when bitcoin and Ethereum plunged as much as 84% and 94%, respectively…

• I watched bitcoin crash more than 50% in two days during the COVID pandemic…

• And I witnessed bitcoin plunge as much as 30% in the aftermath of the FTX implosion.

Each time, it felt like the end. But as you know, bitcoin – and the overall crypto market – eventually recovered and soared to new highs.

But nothing – and I mean nothing – compared to what we saw this past Friday, October 10.

That morning, President Trump shocked the markets when he threatened to impose additional 100% tariffs on Chinese imports.

The statement sent shockwaves through global markets. Stocks, commodities, and currencies all reacted instantly.

The S&P 500 plunged nearly 3% – its worst single-day drop since the tariff tantrum in April 2025. The Nasdaq tumbled almost 4%, wiping out weeks of gains. Treasury yields spiked. The world’s oldest safe haven, gold, soared to record highs above $4,200.

And crypto? The entire asset class got crushed.

Within hours, bitcoin dropped more than 13%. And nearly $19 billion in leveraged crypto positions were wiped out. That’s not a typo.

It was the largest one-day liquidation event in crypto history, far surpassing what we saw during COVID or the FTX meltdown.

Now, that’s the headline story you’ll hear on CNBC or Bloomberg. They’ll tell you it was the tariff threats that sparked the massive sell-off.

But that’s not the real story.

The tariff threat may have triggered the sell-off – but it wasn’t the underlying cause of the crypto market meltdown.

The real problem came from inside the system. And understanding what really happened will show you why this will be another opportunity for those who can act when others run in fear.

The Hidden Fault Line Beneath the Crash