Key takeaways
- On October 10, 2025, about $19 billion of leveraged crypto positions were liquidated in hours, the largest liquidation event on record.
- Bitcoin had peaked at about $126,000 four days earlier and fell to around $60,000 by February 2026.
- Leverage, not crypto itself, caused most of the damage: borrowed positions were closed automatically as prices fell.
- Reserve-backed stablecoins like USDC and USDT held their value; some exchange-specific assets briefly did not.
What Happened on October 10, 2025
On October 6, 2025, Bitcoin reached an all-time high of about $126,000. Four days later, on Friday, October 10, a US announcement of new 100% tariffs on Chinese imports hit global markets after US stock trading had closed. Crypto trades around the clock, so it absorbed the shock first.
Prices fell sharply, and that set off a chain reaction. Within hours, roughly $19 billion of leveraged positions were liquidated across exchanges, affecting about 1.6 million trading accounts. It was the largest single liquidation event in crypto's history.
What Is a Liquidation, in Plain Language?
Many traders borrow money to make bigger bets, known as trading with leverage. If you put in $1,000 with 10x leverage, you control a $10,000 position. That magnifies gains, but a 10% price drop wipes out your entire $1,000. At that point the exchange closes your position automatically to protect the loan: that is a liquidation.
The danger is the cascade. Forced selling pushes prices lower, which triggers more liquidations, which pushes prices lower still. On October 10, that loop ran through billions of dollars in minutes. Our guide to perpetual futures explains how leveraged trading and liquidation prices work.
When a "Stable" Asset Wobbled
During the crash, several assets used as collateral on Binance traded well below their expected value on that exchange, including the synthetic dollar USDe and two staked-token products. Users holding them as collateral were liquidated even though the assets held their value elsewhere. Binance later paid about $283 million in compensation to affected users and changed how it prices these assets.
The lesson is about what backs a dollar token. Fully reserve-backed stablecoins like USDC and USDT, which mostly hold cash and short-term Treasuries, kept their $1 value through the crash. Synthetic dollars and wrapped products depend on trading strategies, liquidity, and the exchange's own price feeds, which can break under stress. Our USDC vs USDT comparison explains reserves in more detail.
The Year After: From $126,000 to $60,000 and Back Up
| Date | Bitcoin price (approx.) | What happened |
|---|---|---|
| October 6, 2025 | ~$126,000 | All-time high |
| October 10, 2025 | Sharp drop | ~$19B in liquidations |
| February 6, 2026 | ~$60,000 | Low point of the decline |
| Early October 2026 | ~$86,000 | About 32% below the peak |
A drop of more than 50% from the top, followed by a partial recovery, is a pattern Bitcoin has repeated several times in its history. It is a reminder that even the largest crypto asset can lose half its value within months.
Five Lessons for Everyday Users
- Avoid leverage unless you fully understand it. Most of the money lost on October 10 was lost by people trading with borrowed funds, not by people who simply held.
- Keep money you need soon in a stable asset. A reserve-backed dollar stablecoin protects your spending money from crypto price swings.
- Know what backs your "stable" coin. Cash and Treasuries are not the same as a trading strategy.
- Buy gradually. Spreading purchases over time reduces the risk of buying everything at a peak. Our guide to capital allocation covers this.
- Don't panic-sell into a cascade. Forced selling creates extreme, short-lived prices. Decisions made in those minutes are rarely good ones.
Wondering whether you missed your chance after the crash? Read is it too late to get into crypto.
Frequently asked questions
What caused the October 10, 2025 crypto crash?
A US announcement of new 100% tariffs on Chinese imports triggered a sharp sell-off, which set off a chain of forced liquidations of leveraged positions.
How much was liquidated on October 10?
About $19 billion of leveraged positions across roughly 1.6 million trading accounts, the largest liquidation event in crypto's history.
Did stablecoins hold their value during the crash?
Fully reserve-backed stablecoins like USDC and USDT kept their $1 value. Some exchange-specific assets, including the synthetic dollar USDe on Binance, briefly traded below their expected value.
Where is Bitcoin now compared with its peak?
Bitcoin peaked at about $126,000 on October 6, 2025, fell to around $60,000 in February 2026, and was about $86,000 in early October 2026.
This article is for educational purposes only and is not financial advice. Prices are approximate and based on public reports.