The global financial system registered a significant shock on October 10, 2025, following U.S. President Donald Trump's announcement of an unprecedented 100% tariff targeting all imports from China. This sweeping trade measure, scheduled to begin on November 1, 2025, was presented as a direct response to Beijing's recent tightening of export controls on vital rare-earth minerals. The immediate and most pronounced effect of this escalation in trade friction was observed in the digital asset markets, forcing participants into an immediate and sharp risk reassessment.
The trade dispute acted as a major catalyst, leading to one of the largest liquidation events in the history of the cryptocurrency market. Within a single 24-hour period after the news broke, data from sources such as CoinGlass indicated that over $19 billion in leveraged positions were forcibly closed. This shockwave rippled across major digital assets. Bitcoin (BTC), which had been trading near $122,000, quickly fell beneath the $110,000 mark. Ethereum (ETH) and Solana (SOL) also faced substantial downward pressure as the market absorbed the systemic risk signaled by the escalating trade conflict.
As of the market data reference date of October 12, 2025, BTC was observed trading around $111,911, showing a minor daily dip of 0.53% while fluctuating in an intraday range between $109,743 and $112,578. In contrast, SOL registered a 2.10% decline to $181.95, while ETH posted a slight gain of 0.85% to $3,832.57, suggesting varied asset resilience following the initial panic. Zaheer Ebtikar, founder of the crypto hedge fund Split Capital, summarized the market's reaction, stating the "altcoin complex got absolutely eviscerated—full leverage reset and market dislocation."
Analysts noted that the sudden, sharp shift in U.S.-China trade relations was the primary driver behind the extreme volatility. The event highlights how macro geopolitical decisions can instantly alter the perceived stability of highly leveraged, speculative markets. The U.S. administration framed the tariffs as a necessary recalibration of global supply chain dependencies, especially concerning strategic materials like rare-earth minerals, which are crucial for high-tech manufacturing. The market's current posture reflects a collective pause, observing how quickly the interconnected global system will adapt to this significant structural imposition by a major world power.