The biggest crypto crash so far wasn’t a failure, but proof that the system works

Not a month after one of the largest cryptocurrency selloffs, in which $3.62 billion in long positions were wiped out, the sector has outdone itself. On October 10, nearly $20 billion disappeared. To make it sting even more, this happened in October, the month when crypto traders usually toast for good luck.

Here’s how it happened. Last week, President Trump decided to throw another grenade across the Pacific, announcing via Truth Social a 100% tariff on all Chinese imports starting November 1, coupled with new export controls on critical U.S. software. It was the most aggressive move since May’s fragile truce, marking a sharp break from earlier rhetorical threats that had been watered down or delayed.

Normally, such statements barely move the needle. But this one landed. No exceptions, virtually no delays and, most importantly, it was accompanied by new export controls on critical US software, which the market interpreted as a real policy change rather than a negotiating tactic.

That suggested Washington was ready to weaponize technology and trade in tandem, just after China imposed drastic export controls on rare earth minerals, a moment that made the U.S. response look retaliatory and amplified the sense that the trade truce was truly over, a move that rattled every risk asset from stocks to Bitcoin.