What caused the October 2025 crypto crash?

The October 2025 crypto crash was caused by a macro shock landing on a market loaded with leverage. A tariff announcement on Friday, October 10 set off selling, and forced liquidations then fed on themselves. This guide looks at the chain of causes; what liquidation means for a single trader is covered in what happens if you get liquidated in crypto.

Why did crypto crash in October 2025?

CoinGecko's timeline puts the trigger at 14:57 UTC, when President Trump posted that a 100% tariff on all Chinese imports would start on November 1. 21Shares notes the timing made things worse. The news came after the US stock market closed and before the Columbus Day long weekend, when trading is usually thin.

The market was primed to fall. CoinGecko says futures open interest was near a record $217 billion beforehand, and funding rates had reached about 30% a year by October 6, a sign that too many traders were leveraged long and paying heavily to stay that way.

Was it the biggest liquidation event in crypto?

By reported figures, yes. CoinGecko, citing Coinglass, says more than $19 billion of positions were closed on October 10 and 11, across over 1.6 million accounts. About 70% of that happened in a 40-minute window from 20:50 UTC, and $3.21 billion went in a single minute. 21Shares says nearly 90% were long positions, which makes it a long squeeze, the mirror image of a short squeeze.

The true total is uncertain. Not every venue reports liquidations, and 21Shares cites internal estimates near $30 billion, while CoinShares says losses could have been higher still.

Why did altcoins fall so much harder?

Liquidity vanished. CoinShares says big liquidity providers cut risk and withdrew, so order books thinned and spreads widened. On Binance, old resting sell orders on some small tokens, such as ATOM and IOTX, filled against almost no buyers, The Block reported, briefly printing extreme lows.

Infrastructure also strained. CoinShares says dYdX was offline for nearly eight hours and Lighter had a serious outage, so some traders could not add collateral. Once insurance funds ran short, auto-deleveraging closed profitable positions to cover losses, and CoinShares says Hyperliquid used it on short positions. CoinGecko adds that cross-margin accounts carried losses from one coin into others. The wider pattern is explained in why do altcoins follow bitcoin.

What happened with the USDe depeg on Binance?

On Binance only, Ethena's USDe and two staking tokens, BNSOL and WBETH, traded far below their usual value between about 21:36 and 22:16 UTC. Binance priced them as collateral from its own order books rather than outside price feeds, CoinGecko says, so holders using them for margin were liquidated. Binance said prices had already bottomed before the depeg, and that about 75% of liquidations came earlier. It paid about $283 million in compensation. Ethena's CEO argued it was not a true depeg because other venues stayed near normal. How USDe works is covered in what is Ethena USDe.

Rumors of a coordinated attack spread, but CoinShares describes them as unverified. Leveraged trading can lose money faster than buying outright.