Market Risk

The October 2025 Crash, One Year Later: Lessons for AI Token Holders

A year after the record $19 billion liquidation of October 10, 2025: how leverage, thin order books and exchange pricing fed it, and the lessons for AI tokens.

AiTokens Research · October 21, 2026 · 7 min read

Seen over a harbor pilot's shoulder, one big ship floats in a deep channel while small boats sit stranded on mud flats a year after a storm.

The October 2025 crypto crash liquidated more than $19 billion of leveraged positions on October 10, the largest single-day event on record, according to CoinGlass data cited by CoinDesk Research. Tariff news set it off. Leverage, thin order books and exchange-specific pricing turned a sell-off into a cascade. A year later, bitcoin and ether liquidity has rebuilt, but altcoin liquidity has kept shrinking. For AI token holders, the lessons are about leverage and liquidity, not the headline number.

Key takeaways

More than $19 billion in leveraged positions was liquidated on October 10, 2025, after the U.S. announced 100% tariffs on Chinese imports.
Altcoins took the worst of it: CoinDesk Data's top 100 tokens averaged a 58% intraday drawdown, and several altcoins fell more than 75% within minutes.
One exchange's own prices for collateral fell far below prices elsewhere. Binance later paid about $283 million in compensation.
A year on, altcoin order books are thinner in dollar terms than at the start of 2025, CoinDesk Research found.

What happened on October 10, 2025?

On Thursday, October 9, China's Ministry of Commerce said foreign entities would need a license to export products containing more than 0.1% rare earths sourced from China. On Friday, October 10, President Trump announced 100% tariffs on all Chinese imports, The Block reported. The news hit thin Friday-evening trading, days after bitcoin had set a record above $126,000.

Within half an hour, bitcoin fell about 10%, briefly below $105,000, and ether fell more than 12% to $3,500, DL News reported. CoinDesk Research counts more than $19 billion of positions liquidated within 24 hours, and total perpetual futures open interest, the value of outstanding leveraged contracts, fell 43% in a day, from $217 billion to $123 billion.

A liquidation is the forced closing of a leveraged position when its collateral runs short. The $19 billion counts the full size of the positions closed, much of it borrowed exposure, so it measures leverage unwound, not money lost.

Why did small tokens fall so much further?

Leverage had been building all year. Open interest in ether futures rose from about $23 billion at the start of 2025 to just under $60 billion on the eve of the crash, DL News reported, citing CoinGlass. When prices dropped, those positions were sold into the market at once.

Buyers were scarce even in the biggest markets. CoinDesk Research found that visible depth on major assets "evaporated" as market makers, the firms that post standing buy and sell orders, withdrew their bids. Smaller tokens, with far less depth to begin with, fell furthest. "Smaller-cap assets experienced deeper intraday drawdowns," CoinDesk Research wrote, with its Top 100 tokens down 58% on average at the worst point. Across every token CoinDesk Data tracks, the average decline was about 47%, against about 41% in the May 2021 crash, and "several altcoins plunged by more than 75% within minutes." DL News recorded Solana down 17%, Hyperliquid 45% and Sui 70%.

Each forced sale on a thin order book pushes the price down far enough to trigger the next liquidation. Many exchanges then auto-deleveraged, closing profitable short positions to stop bad debt from piling up, so some traders on the right side of the move were closed out too. Our guide to why small AI tokens crash hardest explains the order-book side.

What went wrong with collateral prices?

The second accelerant was pricing. Ethena's USDe, a synthetic dollar, fell to about $0.65 on Binance, CoinDesk Research reported, and WBETH and BNSOL, Binance's own staked-ether and staked-SOL tokens, also broke from their usual prices there. Elsewhere, USDe held much closer to $1: 21Shares found the drop was confined to Binance's internal order books, while Curve and Ethena's own mint-and-redeem process stayed near $1.

That gap mattered because margin systems valued collateral at the venue's own distressed price. Traders who had posted these assets as collateral were liquidated even though the assets' redemption value hadn't collapsed. CoinDesk Research named "exchange-specific pricing oracles and shared-collateral mechanisms" as accelerants. An oracle here is simply the price feed a platform uses to value positions.

Binance said it paid about $283 million to Futures, Margin and Loan users who held USDe, BNSOL or WBETH as collateral and were hit between 21:36 and 22:16 UTC, The Block reported. It also said it would add the assets' redemption prices to its index weights and set a soft price floor for USDe, while arguing that the broad market had bottomed before the worst of the depeg. Ethena's chief executive, Guy Young, disputed calling it a USDe depeg at all, saying a single venue was out of line with the deepest pools of liquidity. The contagion path is the one we describe in stablecoin risk and AI tokens.

What has changed one year later?

For the largest assets, a lot. In an analysis published October 10, 2026, CoinDesk Research found that bitcoin's order book held about $11.7 million within 1% of the price on October 7, roughly 75% more than on crash day, and that ether's depth within 0.5% had more than doubled, to about $4.2 million.

Altcoins are another story. Their dollar depth peaked on January 1, 2025 and has been lower on every date measured since; at 5% from the price it is down about a third, to around $2 million. CoinDesk Research's Joshua de Vos expects the gap between majors and altcoins to persist into next year.

Most AI tokens live on the thin side of that divide. On our tracker, 556 of the 677 AI tokens we follow traded less than $1 million in the 24 hours to October 16, 2026, and NEAR alone accounted for nearly half of all AI-token trading volume that day.

What should AI token holders take from it?

Leverage turns a bad hour into a permanent loss. Prices bounced within days: bitcoin rebounded to about $116,000 before slipping again, CoinDesk Research reported, and Bittensor's TAO was up 32% over the seven days to October 15, crash included, according to DL News. A position liquidated at the low got none of that.
Size trades for the order book, not the chart. A token that trades less than $1 million a day can move sharply on one large order, and market makers can pull back exactly when you need them, as they did on October 10.
Know which price your platform uses. If you post collateral, find out how the venue values it and what happens when its own market breaks.
Don't treat a dollar token on one venue as cash. USDe's redemption value held while its Binance price didn't.

What the AI Score shows

Two of the AI Score's five questions speak directly to a day like October 10: "Can I get in and out?" and "How badly could this hurt?" The score answers them for the token, not for your position. It can't see whether you used leverage or which venue prices your collateral, and on a thin order book those choices can matter more than any rating.

Check any token's AI Score on AiTokens.app before you decide.

Frequently Asked Questions

How much was liquidated in the October 2025 crash? More than $19 billion in leveraged positions within 24 hours on October 10, 2025, according to CoinGlass data cited by CoinDesk Research, the largest single-day liquidation on record. The figure is the size of the positions closed, not the money traders lost.

What caused the October 10, 2025 crash? The trigger was the announcement of 100% U.S. tariffs on Chinese imports, a day after China announced export licensing rules for rare-earth products. Heavy leverage, thin order books and exchange-specific collateral pricing turned the sell-off into a cascade.

Did Binance reimburse traders? Binance said it paid about $283 million to Futures, Margin and Loan users who held USDe, BNSOL or WBETH as collateral and were hit during a 40-minute window that evening, The Block reported. It also said it would add the assets' redemption prices to the index it uses to price them.

Has crypto liquidity recovered since the crash? For bitcoin and ether, largely yes: CoinDesk Research found their order books well above crash-day depth in October 2026. Altcoin dollar depth has been lower on every date measured since January 1, 2025.