How $150 billion was liquidated from crypto market in 2025 driving Bitcoin crash

Forced liquidations in the crypto derivatives market totaled approximately $150 billion across 2025, which, while high, was a structural byproduct of massive $85.7 trillion in annual turnover where derivatives set the marginal price. The major crash occurred around October 10th after President Donald Trump announced 100% tariffs on Chinese imports, causing a global risk-off move that collided with a highly leveraged, long-biased crypto market.

Spot prices fell, triggering margin calls that forced exchanges to liquidate under-margined long positions into thinning order books, resulting in over $19 billion in liquidations in just two days. This stress exposed the danger of Auto-Deleveraging (ADL), a contingency mechanism that began closing profitable opposing positions to protect exchange balance sheets, turning hedges into realized losses and amplifying the crash, especially in less liquid mid-cap and long-tail markets where tokens fell 50% to 80%.

The event highlighted that the crash was driven by the interaction of product design, margin logic, and infrastructure limits, exacerbated by venue concentration—the top four exchanges handled 62% of volume. When stress hit, these concentrated venues de-risked simultaneously, and strained inter-exchange transfer systems prevented traders from rebalancing collateral, causing arbitrage capital to retreat. The $150 billion liquidation figure ultimately represents how a derivatives-dominated market clears risk, showing that safeguards designed for normal conditions can become crash amplifiers under stress.

(Source：CryptoSlate)