Cryptocurrency markets plummeted on Oct. 10 after the U.S. president imposed a 100% tariff on China, wiping out nearly $760 billion in value and triggering $19 billion in forced liquidations within 24 hours. Gold, meanwhile, climbed to record highs above $4,000 per ounce, raising fresh doubts about whether Bitcoin can fulfill its longstanding promise as a reliable store of value during economic turmoil.
What to Know:
- The crypto market cap dropped from $4 trillion to $3.24 trillion on Oct. 10, with Bitcoin falling 11% to $107,485 and Ethereum declining more than 15% below its $4,000 support level.
- The selloff liquidated 1.6 million traders in what analysts dubbed "Crypto Black Friday," setting a new benchmark for market volatility despite a subsequent recovery.
- Gold reached $4,096 per ounce by Oct. 13, continuing a rally that has pushed the precious metal up more than 50% this year while Bitcoin struggled to regain stability.
Tariff Shock Triggers Historic Liquidation Event
The Oct. 10 announcement sent shockwaves through cryptocurrency markets. Bitcoin, which had reached an all-time high above $126,000 just four days earlier on Oct. 6, lost more than 11% of its value. Ethereum collapsed through the $4,000 threshold, shedding over 15% as selling pressure intensified across the sector.
The cascading liquidations erased 1.6 million leveraged positions, a record that underscored the fragility of a market that trades around the clock. Nic Puckrin, crypto analyst and co-founder of The Coin Bureau, called the weekend's turmoil "a brutal reminder" of inherent vulnerabilities.
"As the crypto market grows and matures, the risks are amplified," Puckrin said. "The arrival of spot crypto ETFs and institutional interest has lulled investors into a false sense of security, but it remains the only market that trades after hours."
Thin liquidity combined with excessive leverage and growing influence from institutional players created what Puckrin described as "a toxic cocktail" that accelerated the selloff. The president's subsequent comments easing tariff concerns helped spark a rebound. Bitcoin surged past $115,000, and Ethereum reclaimed the $4,000 mark.
The broader market capitalization rose more than 5% over the following day.
"Ironically, now that the dust has settled, many blue-chip tokens have seen a strong rebound – including Ethereum, which is looking particularly strong back above $4,000," Puckrin said. "As such, many spot investors find themselves in a similar position to where they were before the flash crash. This is certainly an argument against excessive leverage in a market with fluctuating liquidity in such an uncertain geopolitical climate."
Gold's Divergence Renews Store of Value Debate
Gold's trajectory during the same period stood in stark contrast.
The precious metal set a new record on Oct. 13, reaching $4,096 per ounce while Bitcoin remained in recovery mode. Economist Peter Schiff noted the disparity.
"Gold and risk assets, including Bitcoin, are up this evening," Schiff said. "But while Bitcoin is just recovering part of Friday's loss, gold is trading above $4,050, close to a new record high, as it had no Friday loss to recover. Silver is also near a new record high."
The divergence has reignited debate over Bitcoin's characterization as "digital gold." While gold's performance reinforced its traditional role as a safe haven during geopolitical tensions and inflationary concerns, Bitcoin's volatility and sensitivity to macroeconomic shocks challenged claims that it can rival gold as a dependable store of value during crises.
Puckrin cautioned that gold's rally carries its own risks. After gaining more than 50% this year, the precious metal has attracted momentum traders who could exit quickly if sentiment shifts.
"While it's very possible that gold will continue to outperform other assets for the foreseeable future, it has certainly become a crowded trade," he said. "And that means there is more risk involved in initiating exposure at this point."
Market Terminology and Investment Dynamics
Liquidations occur when exchanges automatically close leveraged positions after traders can no longer meet margin requirements, typically during rapid price declines. Leverage allows traders to control larger positions with borrowed funds, amplifying both potential gains and losses. The Oct. 10 event demonstrated how overleveraged positions can accelerate market crashes when prices move against traders simultaneously.
Safe haven assets traditionally retain or increase value during economic uncertainty. Gold has served this function for centuries, backed by its physical scarcity and universal recognition. Bitcoin proponents argue the cryptocurrency offers similar qualities through its fixed supply cap of 21 million coins, but its brief history and price volatility have prevented widespread acceptance as a crisis hedge.
Goldman Sachs now projects gold will reach $4,900 by December 2026. Puckrin suggested investor attention could shift to alternative assets offering similar hedging qualities, including other metals, commodities, tokenized real-world assets and Bitcoin, all of which remain comparatively undervalued against gold.
These alternatives appeal as protection against inflation, currency debasement and political uncertainty.
"Gold's record run is fuelling fresh price projections, with Goldman Sachs now expecting the shiny metal to reach $4,900 by next December," Puckrin said. "Even if gold's rally does continue unabated to Goldman Sachs' 2026 year-end target, other assets are already playing catch-up. This shift may well become the dominant narrative for the remainder of 2025 as gold takes a breather."
Final Thoughts
The "Crypto Black Friday" crash exposed persistent fragility in digital asset markets amid global tensions. Bitcoin's rebound, while swift, did little to resolve questions about its volatility, and gold's surge demonstrated that traditional safe havens retain investor confidence during periods of uncertainty.