Black October: Trump's Tariffs Trigger $19B Liquidation

On Monday 6 October 2025 bitcoin traded at $126,080, the highest price it had ever reached. That same day investors put about $1.2 billion into US bitcoin exchange-traded funds (ETFs), funds that hold bitcoin and trade on the stock market like a share, after a record $3.55 billion the week before. The whole crypto market was worth about $4.3 trillion, also a record. Traders call the month "Uptober", because bitcoin had not had a losing October since 2018.

It did not rise in this one. Four days after the record, on Friday 10 October, $19.16 billion of borrowed bets on crypto prices were forcibly closed in 24 hours, according to the data firm CoinGlass, the largest wipeout on record. By 16 October the crypto market had shrunk to about $3.58 trillion, roughly $700 billion lower in ten days. By the last day of the month bitcoin was down for October, the first losing October since 2018, and the shocks of those four weeks set the course for the bear market that followed.

The Friday that broke the month

The trigger was trade. On 10 October President Donald Trump threatened, then announced, an extra 100% tariff on Chinese imports, in reply to new Chinese limits on exports of rare earth minerals. The second post came after Wall Street had closed for the weekend, when crypto was the only big market still open. Bitcoin fell from about $121,000 to as low as $102,000 on some exchanges. Hundreds of smaller coins fell far further for a few minutes.

The damage came from leverage, trading with borrowed money. A trader puts down a deposit and an exchange lets them bet several times that amount; if the price moves against them far enough to eat the deposit, the exchange sells them out automatically. It is a margin call with no phone call. Going into that Friday a record amount of borrowed money was riding on prices going up, and each forced sale pushed prices down into the next. The hour-by-hour story, the role of Binance's broken internal prices and the people who lost everything are told in 10/10, One Year On: The Day Crypto Lost $19 Billion in 24 Hours. What follows is what the rest of the month did with it.

The quiet threat to the treasury companies

The second blow of October was slower and came from an index company. In October 2025 MSCI, whose stock indexes are tracked by trillions of dollars of pension and index funds, opened a consultation on whether to remove "digital asset treasury companies" from its global indexes. These are listed companies whose main business is holding crypto, usually bought with borrowed money or new shares. The largest is Strategy, formerly MicroStrategy, run by Michael Saylor, which owned about 640,000 bitcoin at the time. MSCI's test was simple: a company with half or more of its assets in crypto might be treated as an investment fund, and funds are not eligible for its indexes.

Being dropped from an index forces every fund that tracks it to sell. JPMorgan later estimated that removing Strategy from MSCI's indexes alone could trigger about $2.8 billion of selling. The market started pricing the risk at once. Strategy's shares had long traded at a large premium to the bitcoin it owned, a premium it used to raise money for more bitcoin. On 10 October that premium fell to about 1.17 times its holdings, the lowest since February 2024. By mid-October Japan's Metaplanet, another bitcoin treasury company, was trading below the value of its own coins, CCN reported. The companies that had been among the steadiest buyers of bitcoin all year were losing the means to keep buying.

A month of false dawns

The rest of October kept offering relief and taking it back. On 12 October Trump posted "Don't worry about China, it will all be fine!" and bitcoin bounced. On 16 October two US regional banks, Zions and Western Alliance, disclosed bad loans and alleged fraud, bank shares fell, and bitcoin followed, dropping below $105,000 on 17 October, its lowest since June. That week investors pulled $1.23 billion out of bitcoin ETFs, the second-largest weekly outflow since the funds launched in January 2024, according to The Block.

Wall Street kept building anyway. On 28 October, during a US government shutdown, Bitwise launched an ETF holding Solana's coin directly, which drew $69.5 million on its first day, while Canary Capital launched the first US funds directly tracking Litecoin and Hedera. On 29 October the Federal Reserve cut interest rates by a quarter point, normally good news for risky assets, but its chair Jerome Powell said a further cut in December was "not a foregone conclusion. Far from it." Bitcoin fell below $110,000. On 30 October Trump and China's President Xi Jinping agreed a trade truce in Busan, South Korea. The 100% tariff that started the month's selling was never imposed.

The month's numbers show how the money moved. US bitcoin ETFs still took in a net $3.4 billion in October, according to Farside data, almost all of it before the crash; after 10 October the flows turned. Bitcoin ended the month a few percent below where it began, the first red October on CoinGlass's records since 2018. That sounds mild. It hid a fall of about 17% from the record to the 17 October low and a market that had lost the borrowed money and the corporate buyers that had driven it.

What October started

October 2025 turned out to be the top. Bitcoin slid through November and the winter, fell to about $63,000 in early February 2026 and hit $57,800 on 1 July 2026, its lowest since the crash. In mid-October 2026 it trades in the low $80,000s, about a third below the October 2025 record.

The index threat came back too. MSCI dropped its first plan on 6 January 2026 and promised a broader review. In mid-October 2026, after a second consultation, it adopted rules making "non-operating companies" ineligible for its global indexes. Its first simulation, using May 2026 data, named Strategy, Metaplanet and the uranium holder Yellow Cake as possible removals. The final list is due on 11 November 2026 and the changes take effect after the close on 30 November. A year after Black October, the buyers who were supposed to make bitcoin calmer are still deciding whether they can stay in the market at all.