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The cryptocurrency market suffered another shock after China retaliated against U.S. tariff measures, rekindling fears of an escalating trade war. Bitcoin fell below the $112,000 mark, losing about 3% on the day, while other major cryptos like Ethereum, Solana, and Dogecoin also dropped between 4% and 6%. This decline occurred amid a wave of risk aversion that also hit Asian stock markets, notably Japan’s Nikkei, which fell more than 3%—its worst session in nearly two months.
The announcement of Chinese sanctions against U.S. entities linked to South Korean shipbuilder Hanwha Ocean reignited economic tensions between Beijing and Washington. The decision had a domino effect on global markets: futures for the S&P 500 and Nasdaq 100 fell as investors fled to safe-haven assets like U.S. Treasury bonds, whose yields slightly declined, while the yen strengthened. Gold and silver, which had initially gained, eventually gave up their gains amid heavy afternoon selling.
In the crypto space, volatility intensified: according to CoinGlass, total liquidations reached $630 million, with nearly two-thirds coming from long positions. This correction follows a series of market disruptions that began the previous week after President Donald Trump’s threat to impose 100% tariffs on Chinese imports. That episode had already triggered one of the largest liquidation events ever recorded in the derivatives market, wiping out nearly $20 billion in positions within 24 hours.
For many observers, this correction primarily represents a natural market reset after months of excessive leverage. CryptoQuant analyst Axel Adler Jr. estimated that 93% of the open interest decline recorded on Friday reflected an “orderly deleveraging” rather than a panic-driven collapse. Of the $14 billion wiped out, only $1 billion came from forced liquidations of long Bitcoin positions. Adler even viewed this as a sign of growing market maturity, with crypto proving capable of absorbing shocks without systemic destabilization.
Others, however, are less optimistic. Independent analysts have accused certain market makers of worsening the crash by withdrawing liquidity at a critical moment, creating a genuine “liquidity vacuum.” Researcher YQ noted that market depth across several tokens dropped by 98% just one hour after news of the U.S. tariff threats, accelerating the plunge. In this context, 24/7 crypto markets became the only outlet for global investor reactions, amplifying the chain reaction. It wasn’t retail panic that caused the crash but rather a massive collapse of leveraged positions held by professional traders on centralized exchanges.
Analysts explain that this turmoil highlights the risks of leverage, which allows traders to amplify their bets using borrowed funds. The same mechanism magnifies losses: when a position falls below the required margin threshold, the exchange automatically closes it—a process known as liquidation. On Friday, Bitcoin’s sharp drop triggered a cascade effect, with nearly 1.6 million positions forcibly liquidated, including some that might have survived a more gradual decline. Exchanges’ liquidation systems ended up dumping large volumes, accelerating the price collapse even further.
At the heart of the issue are perpetual contracts—a type of derivative with no expiration date that allows traders to speculate indefinitely on Bitcoin’s price. These products, extremely popular on platforms like Hyperliquid, rely on funding rates to balance long and short positions. But when markets become imbalanced—as they did following Trump’s announcement—the adjustment mechanism spirals out of control, forcing exchanges to liquidate oversized positions. This explains why Friday’s drop surpassed the scale of previous crashes in 2020 (COVID) and 2022 (FTX).
The Fear & Greed Index fell to its lowest level since April, signaling extreme fear—often seen as a buying opportunity. Analysts remain cautiously optimistic: the prospect of a Federal Reserve rate cut in late October, combined with steady institutional inflows and a shrinking on-chain supply, could revive the market.
Arthur Hayes, co-founder of BitMEX, is challenging one of crypto’s core beliefs: according to him, the famous four-year Bitcoin cycle is now obsolete. In his latest essay, “Long Live the King,” he argues that previous market peaks and crashes weren’t tied to halving dates but to global liquidity cycles. Hayes shows that 2014, 2018, and 2022 all coincided with monetary tightening periods, while bull markets aligned with credit expansion and looser policy. Looking ahead to 2025, he believes crypto’s trajectory will no longer depend on a fixed schedule but rather on the pace of money creation. He foresees an era of shallower, liquidity-driven corrections guided by capital availability and central bank policy. Hayes contends that the signs are clear: Washington and Beijing are both moving toward easier monetary policy, with more liquidity and lower interest rates—a setup that should, in his view, keep fueling Bitcoin’s rise. The former trader even compares Bitcoin’s likely path to gold’s performance between 2004 and 2010, a six-year bull run sparked by the launch of the first gold ETFs. He suggests that 2024 could be Bitcoin’s equivalent of 2004 for gold—the start of a prolonged expansion cycle fueled by massive institutional inflows. In short, for Hayes, the “four-year cycle” is dead, and the “liquidity cycle” has begun—ushering in a new decade of Bitcoin dominance.
Venezuelan activist María Corina Machado, a leading figure of the opposition to Nicolás Maduro’s regime, won the 2025 Nobel Peace Prize for her efforts to promote democracy and civil rights in Venezuela. But beyond politics, one aspect caught the crypto community’s attention: Machado is a vocal supporter of Bitcoin, which she views as a tool of resistance against economic tyranny. In a Bitcoin Magazine interview from September 2024, she explained that, amid financial repression and the collapse of the bolivar, many Venezuelans found Bitcoin to be a means of survival. According to her, the cryptocurrency has evolved from a humanitarian tool into a true form of resistance against corruption and hyperinflation. She even envisions Bitcoin becoming part of Venezuela’s national reserves in a future democratic government, helping to restore the wealth stolen by the dictatorship. Her stance was widely praised in the crypto industry. Jeff Park, Chief Investment Officer at ProCap, noted that this marks the first time a Nobel Peace Prize laureate is a Bitcoiner. Bradley Rettler of the University of Wyoming likewise applauded Machado’s vision, saying she perfectly embodies the idea of “resistance money”—a currency free from authoritarian control.
Twin brothers Cameron and Tyler Winklevoss, founders of the Gemini exchange, have for over a decade championed the idea of Bitcoin as “Gold 2.0”—a digital store of value capable of rivaling physical gold. Their conviction rests on three key pillars: Bitcoin’s limited supply of 21 million coins, its global portability, and its resistance to inflation. In their view, these traits make Bitcoin a superior asset in a world where fiat currencies are constantly devalued. Based on this, they have issued a bold forecast: Bitcoin reaching $1 million, driven by ETF inflows, institutional demand, and growing adoption by nation-states. For the twins, the comparison to gold is more than symbolic—they argue that if Bitcoin reaches parity with gold’s total market value (around $10 trillion), its price could rise to $500,000 or even $1 million, especially if countries begin integrating it into their strategic reserves. This projection is supported by concrete trends: clearer regulation, adoption by nations like El Salvador, and massive inflows into Bitcoin ETFs—all of which reinforce its status as a global reserve asset. Just as gold entered a multi-year bull run following the launch of its first ETFs in 2004, Bitcoin could experience sustained growth over several years. While experts like Arthur Hayes and Tom Lee see more moderate targets between $200,000 and $250,000, the idea of a globally adopted Bitcoin is gaining momentum. Prominent figures such as Brian Armstrong (Coinbase), Jack Dorsey (Block), and Cathie Wood (ARK Invest) all project Bitcoin surpassing $1 million by 2030—further cementing the Winklevoss prophecy that Bitcoin, the “Gold 2.0,” may become the ultimate safe haven of the digital era.
The presented information is as of October 14th, 2025, unless otherwise indicated and is provided for information purposes only. The information comes from sources that we believe are reliable, but not guaranteed. This statement does not provide financial, legal or tax advice. Rivemont Investments are not responsible for any errors or omissions in the information or for any loss or damage suffered.
