What we know is this: Trump did one of his "I'm raising tariffs on China" Truth Social posts after the stock markets closed on Friday October 10th 2025. So far, so normal. He likes doing those kinds of dramatic posts, we've seen dozens of similar tweets this year.
The American stock markets were the last to be closed before Trump's tweet, markets in Europe and Asia had already closed for the week. So only the crypto markets reacted, as they are always open. Again, this is a pattern we've seen many times this year.
But something went badly wrong. It wasn't just a "reaction" or "correction". It was a forceful liquidation event with $19 billion in losses, with most altcoins dropping 60% or more. Neither bitcoin or altcoins have recovered from that day's events.
The CEO of crypto.com posted this table of liquidations the next day and asked for an enquiry (his request has been ignored):
All sorts of rumours have been swirling. Some people noted that shorts had been placed on Hyperliquid shortly before Trump's tweet, indicating insider trading. Others claimed a de-pegging event occured to a stablecoin on Binance, which triggered an automated deleveraging cascade.
More recently, people have pointed fingers at the marketmaker Wintermute (which makes markets on Binance, Coinbase, Bitstamp and other exchanges), alleging they are insolvent. Wintermute denies this.
Others observe that prices on Coinbase and Binance are no longer in sync, with Coinbase coming in lower, indicating American selling.
If you look at the table, the bulk of the liquidations took place on Hyperliquid. Coinbase is notably absent, which indicates they arn't the source of the problem.
Hyperliquid is a DEX that launched in Feb 2025, offering massive leverage. The blurb on Coinmarketcap says the following:
Hyperliquid targets the $128B perpetuals market by offering near-instant settlement (0.07s block times) and up to 40x leverage. Unlike traditional DEXs constrained by Ethereum’s 15 TPS, Hyperliquid’s custom architecture (HyperBFT consensus) processes 200,000 TPS – rivaling Nasdaq’s peak capacity. This solves critical latency issues in derivatives trading while maintaining non-custodial security.
They turned out to be not so liquid - the lack of liquidity combined with the speed at which positions were closed, seems to have amplified the liquidation event.