The sudden drop in price of cryptocurrencies such as Bitcoin and Ethereum has shaken markets and reportedly bankrupted thousands of crypto investors.
On social media people shared screenshots of their portfolios, telling stories of how the flash crash on October 10 had turned millions of dollars of net worth into crushing debts in an instant.
Crypto investor Lebrain wrote on X as he shared a screenshot showing a daily loss of $3.5 million (€3.3 million): “I spent three years showing up every single day 24/7, I sacrificed everything from friends and family and health, literally put blood and tears into this and in a matter of seconds everything is gone.
“I have nothing to show for my work and I will never get that time back.”
Another called DJAL wrote: “I lost $135k [€116.6 thousand] on [cryptocurrency] $PUMP … This was all my and my sister’s life savings. I puked. I don’t know what to do. I am out of words.”
On October 10, social media posts by US President Donald Trump, in which he announced a 100 per cent tariff on Chinese imports starting November 1, had triggered the momentous sell-off in cryptocurrency markets.
The price of Bitcoin dropped by up to 15 per cent from $122,000 to just $103,000. The price of Ethereum fell by around 19 per cent from $4,300 to $3,500. Several lesser-known cryptocurrencies went to practically zero.
While the prices quickly recovered following calming remarks from Trump, the flash crash was enough to trigger the automated liquidation of many investors’ accounts.
Since most predominantly young investors on the crypto scene use high degrees of leverage, effectively debt-financing their crypto purchases, the market crash has left them with sometimes many millions of dollars of debt.
Altogether, the collapse has caused the liquidation of around 1.6 million accounts totalling $19 billion (€16.42 billion) in value, according to investment research firm TKL – making it the biggest crash in crypto markets by volume so far.
In at least one case it has also led to a suicide. On October 11, Ukrainian crypto trader Konstantin Galich was found dead in his Lamborghini Urus SUV in Kyiv.
He had died from a gunshot wound to the head in an apparent suicide after reportedly losing more than €30 million (€25.9 million) in investor funds in the crash.
Not everybody suffered in the crash, though.
Crypto blogger Stephen Findeisen, also known as Coffeezilla, revealed that an unknown trader had made gains of $190 million (€164.2 million) the day before by short-selling Bitcoin and Ethereum right ahead of Trump’s announcements.
Even as prices went down over the course of the day, the unknown trader continued to short-sell cryptocurrencies – rather than close his positions and take profits – until 20:49 GMT. At 20:50 GMT Trump’s post on his Truth Social platform was published in which he announced he would impose a 100 per cent tariff on China, precipitating the flash crash.
“Nobody knew this was coming except – maybe – this guy,” Findeisen said, adding: “This is one of the most blatant crime-is-legal moments we have seen.”
