Nineteen billion dollars vanished in twenty-four hours.
October 10-11, 2025 saw the largest liquidation event in cryptocurrency history. More than 1.66 million traders wiped out. Nearly twenty times larger than the COVID crash of March 2020.
Bitcoin plummeted from $122,000 to below $102,000 on some exchanges. Ethereum crashed 16% below $3,700. Altcoins like Solana and XRP saw 20-30% drops within hours.
The trigger? Trump’s tariff announcements.
The Cascade Nobody Saw Coming
Liquidations happen when leveraged positions get forcibly closed. Traders borrow against their holdings, sometimes at 100x leverage. When prices drop, exchanges automatically sell their collateral to cover losses.
That selling creates more downward pressure. Which triggers more liquidations. Which creates more selling.
A cascade.
Long positions accounted for $16.83 billion of the liquidations. Shorts? Just $2.49 billion. A 6.7-to-1 ratio. The market was overleveraged on the long side.
More than $7 billion evaporated in a single hour during peak chaos.
When Infrastructure Fails
The technical failures: Ethena’s USDe stablecoin, the third-largest with $14 billion in value, briefly crashed to $0.65 on Binance. A 35% drop from its dollar peg.
Wrapped tokens like wBETH and BNSOL diverged significantly from their underlying assets. Price feeds stalled. Market makers pulled liquidity because they couldn’t trust their collateral marks.
Binance anchors most crypto price feeds. When its wrapped assets mispriced and APIs stalled, errors propagated across exchanges. Spreads widened. Liquidity vanished exactly when traders needed it.
Within 24 hours, Binance completed a $283 million reimbursement to affected users. Analysts called it “reputation risk management in the post-CZ era” rather than goodwill. The exchange absorbed the hit without flinching.
That financial capacity matters because of what happened next.
Coordinated Attack?
Dr. Martin Hiesboeck, Head of Research at Uphold, described the event as “a targeted attack” exploiting vulnerabilities in Binance’s Unified Account margin system. Binance announced pricing mechanism updates on October 6, scheduled for October 14. The crash happened October 10-11.
Estimates: the initial dump cost attackers around $60 million but caused destruction amplified over 300 times. Total losses potentially reached $500 million to $1 billion. Traders netted about $192 million from short positions opened minutes before Trump’s tariff announcement.
Hyperliquid founder Jeff accused centralized exchanges of underreporting liquidations by up to 100x. Some traders at Multicoin Capital estimate actual totals could exceed $30 billion.
What This Exposes
The crypto market remains structurally fragile. Overreliance on single-exchange price feeds creates vulnerability. Oracle design can be manipulated.
These aren’t new problems. Similar attacks happened in 2020.
By the following Monday, prices partially recovered. Total market cap reached approximately $3.9-4.0 trillion. BNB hit record highs despite the chaos. Some observers called the rebound a “dead-cat bounce” rather than sustainable recovery.
The Unanswered Question
Was this a coordinated attack or systemic failure?
The data supports both. Massive overleveraging created the conditions. But the timing, profit patterns, and vulnerabilities exploited suggest deliberate action.
Binance’s rapid $283 million reimbursement demonstrates both financial strength and recognition of responsibility. The exchange’s influence within crypto means its failures propagate everywhere.
That’s power and liability in equal measure.
The vulnerabilities exposed here aren’t getting fixed.
And $19 billion in liquidations proved it.
