Amid calls from major investment houses and businessmen since the beginning of the Trump administration to adopt a policy of investing in cryptocurrencies, and the US president’s unprecedented support for the future of the crypto industry, Trump launched his own memecoin, as did his wife, Melania.
He had promised to transform the United States into the global capital of crypto, announcing his intention to establish a national strategic reserve for Bitcoin if he won the election, becoming the first former US president in history to use Bitcoin during a campaign event.
Bitcoin’s value reached a record high within a month of Trump’s victory, surpassing $108,000 just before the double tariffs on China hit a record high of $126,000.
The trade war has dashed the crypto investors’ dreams
Last week, China announced tightened restrictions on the export of rare earth minerals, which are essential to the U.S. military and used in F-35 fighter jets, submarines, satellites, Tomahawk missiles, and other applications, according to a 2025 research note from the Center for Strategic and International Studies (CSIS).
According to the International Energy Agency, China produces 61% of rare earth minerals and controls 92% of global processing, while the United States lacks the capacity to separate these minerals after extraction.
Subsequently, US President Donald Trump announced the imposition of additional 100% tariffs on Chinese imports, starting on November 1, 2025.
He also noted that the planned meeting with Chinese President Xi Jinping on the sidelines of the Asia-Pacific Economic Cooperation summit in South Korea is no longer justified.
Crypto market crashes by the largest amount since the COVID pandemic!
Within hours of Trump’s announcement, the cryptocurrency market cap fell from $4.25 trillion to $4.05 trillion, wiping about $200 billion off the market, according to CoinGecko data.
Bitcoin’s value fell from $126,000 to $102,000, a drop of more than 12%, before partially recovering to $113,096 on Saturday morning.
Ethereum, XRP, and BNB also fell by more than 15%, while exchanges witnessed forced liquidation of leveraged positions as Binance announced technical issues with stop-loss orders and account freezes, compounding traders’ losses.
Cryptocurrencies recorded their largest liquidation since their inception, amounting to approximately $20 billion on October 11. This is equivalent to 20 times the losses resulting from the COVID-19 pandemic ($1.2 billion), and greater than the losses from the collapse of the FTX platform ($1.6 billion).
According to CoinGlass, more than 1.6 million traders liquidated, while markets sold more than $7 billion in less than one trading hour on Friday.
CoinMarketCap attributed the decline to a combination of macro shocks and excessive leverage, describing the day as the worst for crypto since the first quarter of 2025.
Is the Trump administration involved in the Bitcoin collapse?
Just half an hour before Trump’s tariff announcement, a mysterious trader on the Hyperliquid platform opened a massive short position on Bitcoin, netting $88 million in profits, adding to his previous gains to $192 million.
This suspicious timing raised questions about the possibility of internal information leaks or political connections between the user and the Trump family, especially since the account was created on the same day as the announcement, and suspicion was directed at Trump and his son in a wave of sarcastic memes on social media.
Is decentralization turning into a political weapon?
What happened opens a wide door to the vulnerability of the parallel financial system represented by cryptocurrencies to major political shifts.
When a president’s statements or trade policies can wipe out hundreds of billions of dollars in market value within hours, one of the most important promises upon which the crypto philosophy was founded is shattered: freedom from centralization and government control.
Markets no longer react solely to economic indicators or monetary trends, but are also hostage to trade wars and electoral interests.
While Bitcoin was once viewed as a haven against inflation and traditional monetary systems, what happened may herald a new era: crypto as a geopolitical tool rather than an independent investment asset.
Ultimately, the question facing investors today is not whether cryptocurrencies will recover, but whether they will truly remain free from politics.
