Bitcoin is currently trading around the 110,000-dollar level, but following President Trump's announcement last week on October 10, 2025 that he would impose a 100% tariff on high-tech products from China, it suffered a large crash.

This announcement sent a shock to global financial markets, and in the cryptocurrency market more than 1.6 million traders were liquidated within 24 hours, with more than $7 billion worth of positions sold in just one hour, marking the largest liquidation event (loss-cut) in history.

On that day, the largest declines (as of 11:00) saw Bitcoin down 15.8%, Ethereum down 22%, XRP down 51.5% and other substantial declines, albeit temporary.

The amount liquidated is said to exceed the scale of the COVID-19 shock in 2020.

Bitcoin rebounded from around $108,000, but is now ranging from about $115,000 to $111,000, in a pattern of rebound after the drop followed by another decline, currently near the lows of the crash.

This low is testing the lows reached in early September and late September.

Currently, Bitcoin's Fear & Greed Index is 38, indicating "Neutral," but in reality it is closer to bear sentiment.

Next, on Ethereum, during the large drop on the 10th, it briefly fell below $3,600, breaking below September's low. It is more toward August's low level.

On charts it appears to be selling more than Bitcoin.

It subsequently rebounded strongly to around $4,200, then again underwent a decline, and is currently hovering near the September late-low around $4,000.

Investors are debating whether to view this drop as a "buying opportunity" in light of forthcoming monetary easing or as a "wait-and-see" ahead of further declines (considering Bitcoin's four-year cycle).

◯ The essence of market collapse

Star, founder and CEO of OKX, spoke on the X platform. He said that the cryptocurrency industry should seriously reflect on the real reasons behind the global market collapse.

Since January 2025, when President Trump took office, he has pursued an "America First Trade Policy," implementing broad additional tariff strategies. In particular, for China, in February he reinstated a 25% tariff on steel and aluminum products, and in April set a global baseline tariff of 10% on all imports.

And this time's 100% tariff on high-tech products and his firm stance have introduced great uncertainty into the market.

Tariffs affect not only trade but also supply chains and corporate earnings, consequently impacting stock markets, foreign exchange markets, and even the cryptocurrency market. Especially because cryptocurrencies are often viewed as risk assets, they tend to be sold off when geopolitical tensions and economic uncertainty rise.

Despite these backgrounds, the focus now is that during a large crash, massive liquidations occur due to leveraged trading, causing market turmoil.

Even among Japanese investors, some who used systematic trading reportedly recorded losses of several hundred million yen.

This downturn particularly highlighted such scenarios. Binance, the world's largest exchange, has announced that it will compensate losses from trades conducted under exceptional circumstances.

◯ Bitcoin is energy-backed

ZeroHedge noted that "AI is a new global arms race, with countries printing vast sums of money to fund AI investment, causing currencies to lose value. The surge in gold, silver, and BTC is a result of that."

Elon Musk responded to this.

"Therefore, Bitcoin is backed by energy. Fiat currencies can be printed indefinitely, but energy cannot be faked."

From this, it seems to imply that fiat currencies are inherently losing value, while those backed by energy have intrinsic value.

Here is the AI translation:

The background of Bitcoin being said to be energy-backed lies in the following mechanisms.

・Mining process: Bitcoin operates on a "Proof of Work" mechanism, where miners require enormous computing power to verify transactions and generate new Bitcoins.

This calculation consumes vast amounts of electricity. In other words, Bitcoin's existence is backed by actual energy consumption.

・Scarcity and value backing: The total supply of Bitcoin is capped at 21 million, and new Bitcoins are created only through mining. Because this process depends on energy consumption, Bitcoin's value is tied to energy costs.

If energy is considered an "unfalsifiable" resource, then Bitcoin is also claimed to have "unfalsifiable value."

・Comparison with fiat currencies: As Musk points out, fiat currencies are controlled by governments and can be increased as needed, making their value unstable. Meanwhile, Bitcoin does not rely on a central authority and is supported by the tangible cost of energy consumption, so it is regarded as a credible asset "backed by energy."

◯ Bitcoin as a gold-like alternative asset — BlackRock

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(This article has been distributed since 2016.)

Cryptocurrency Market Analysis [October 14]