Crypto's $19 billion flash crash, one year on as prices slide

Bitcoin dropped toward $80,000 this week, days before the first anniversary of crypto's worst single day. On October 10, 2025, a record $19 billion in leveraged positions was wiped out in 24 hours. The timing is not lost on traders.

Prices had been easing all week. Bitcoin traded near $82,500 at 07:30 UTC on October 9, 2026, down about 8 percent from close to $87,000 four days earlier, according to CoinGecko and reporting by CoinDesk. The slide ran across the market. Ether, XRP and Solana all fell harder over the seven days.

What happened on October 10, 2025

The trigger came from Washington. At 14:57 UTC, President Donald Trump posted on Truth Social that the United States would put a 100 percent tariff on Chinese imports from November 1, lifting total duties on China to 130 percent. Risk assets sold off within minutes. Crypto reacted hardest.

By the next day, Bitcoin had fallen from a Friday high of $122,574 to $104,782, a drop of 14.5 percent, according to data cited by CoinGecko. Ether lost 12.2 percent. Solana briefly shed more than 40 percent of its value. Around $350 billion came off the total crypto market value.

Coinglass, a derivatives data firm, put the liquidations at more than $19 billion across about 1.6 million trading accounts and called it the largest such event on record. Most of the damage came in a narrow window: Amberdata logged $3.21 billion closed in the 60 seconds around 21:15 UTC. The $19 billion figure is the notional size of leveraged bets force-closed by exchanges, not cash lost by holders. The two are easy to confuse.

Why a selloff became a cascade

A tariff headline does not erase $19 billion on its own. Thin weekend liquidity, heavy borrowing and the way exchanges close losing bets did the rest. When prices fell, margin calls hit. Forced sales drove prices lower, which set off more forced sales. The loop fed itself.

One exchange drew the most scrutiny. On Binance, the synthetic dollar USDe, issued by Ethena Labs, fell to about $0.65, roughly 35 percent below its $1 target, and two other tokens lost their pegs on the platform. Star Xu, chief executive of rival exchange OKX, blamed Binance's marketing of high yields on USDe for making the damage worse.

Binance rejected that account. The firm said about 75 percent of liquidations happened before USDe moved off its peg, and pointed to the macro shock, high leverage and thin liquidity instead. It confirmed that its pricing had relied on internal order books rather than outside data feeds. Binance later paid affected users between $283 million and $328 million, by its own disclosures. Nobody neutral has settled the argument.

What changed, and what did not

A year later, the fixes are mostly promises. No formal post-mortem of October 10 has been published. Salman Banaei, a former official at the US Commodity Futures Trading Commission, called for a regulatory review of the cascade. None has reported back.

Some damage lingered. USDe never regained the market value it held before the crash, and the memecoin sector shrank from about $80 billion on October 10 to roughly $47 billion by the end of 2025, by CoinGecko's count. Funding yields that once paid traders to hold leveraged positions fell below 4 percent.

Regulators have moved on other fronts. The gap the crash exposed, lightly policed offshore leverage, sits about where it was. Traders can still open heavily geared positions on venues outside the reach of most national rules.

What to watch now

This slide is not the 2025 crash. It is slower, and no single headline set it off. Rising oil prices, climbing US interest rates and a run of fund withdrawals have sapped momentum, CoinDesk reported. About $487 million left US spot Bitcoin funds on Wednesday, October 7, the heaviest daily outflow since June 25, led by BlackRock's iShares Bitcoin Trust, according to Bitcoin.com. Panic has not set in.

Big investors are not running, though. A State Street survey of 300 asset managers, asset owners and wealth managers, published this week, found about 51 percent expect digital assets to reach the mainstream within five years, up from 11 percent in 2024. Regulatory doubt lingers after the failure of the Clarity Act, and US midterm elections loom.

What traders will watch is familiar. Leverage levels. How exchanges set prices when markets gap. Whether a fresh shock, a policy surprise or a data feed error, meets the same thin liquidity that turned a bad Friday into a record one. The anniversary falls on Saturday, October 11.