In a dramatic twist to the escalating US-China trade war, viral posts across social media platforms like X (formerly Twitter) have sent shockwaves through the crypto community. The explosive claim suggests that the Chinese government has liquidated every single Bitcoin it owned—reportedly as an act of retaliation following President Donald Trump’s announcement of 100% tariffs on Chinese imports. The rumor quickly spread across the internet, igniting panic among investors and fueling one of the largest crypto sell-offs in recent history. But is it true—or just another round of crypto market FUD (fear, uncertainty, and doubt)? Here’s a full breakdown of what’s happening.
The Claim: What’s Being Said Online
The story went viral between 7 and 10 AM GMT today, when several X accounts began posting nearly identical claims such as “BREAKING: CHINA HAS SOLD EVERY SINGLE BITCOIN THE GOVERNMENT OWNED AFTER TRUMP’S TARIFFS ANNOUNCEMENT.” Posts from influencers like @Ordinal_News gathered more than 7,800 likes, while others like @I_Psr26 and @Shadow_CryptX shared memes and charts predicting a “generational dip.”
If true, this alleged sell-off would involve dumping an estimated 194,000 BTC—mostly assets seized from the 2019 PlusToken Ponzi scheme, which was worth roughly $2 billion at current Bitcoin prices of around $110,000. In January 2025, CryptoQuant CEO Ki Young Ju had already indicated that China might be quietly selling portions of its Bitcoin stash through proxy firms and exchanges like Huobi, transferring proceeds into the national treasury.
The rumor gained traction just hours after President Trump’s October 10 Truth Social post accusing China of “extraordinarily aggressive” export restrictions on rare earth minerals and announcing 100% tariffs on nearly all Chinese imports effective November 1, 2025. Many online speculators suggested that Beijing’s alleged Bitcoin dump was a symbolic “economic counterattack” aimed at undermining Trump’s pro-crypto policy, as his administration has promoted Bitcoin as a US strategic reserve asset.
However, no official statement has been released from Beijing, and major media outlets such as Reuters, Bloomberg, and CoinDesk have not confirmed any recent government sell-off. Some X users, including @Topi1465795, have pointed out that the posts lack verifiable sources, calling it another case of crypto FUD amplified during market panic.
The Real Cause: Trump’s Tariffs Trigger $125 Billion Crypto Meltdown
While the “China Bitcoin dump” story makes for sensational headlines, the actual market collapse traces directly back to Trump’s trade announcement. On October 10, China’s Ministry of Commerce announced that export licenses would now be required for products containing more than 0.1% rare earth minerals—a move that threatened global tech and EV supply chains.
Within hours, Trump responded on Truth Social: “China has taken an extraordinarily aggressive position... effective November 1, 2025, we will impose large-scale tariffs on virtually every product they make.”
The market reaction was instant. The S&P 500 dropped 2%, wiping out about $1.2 trillion in value, and the Dow Jones fell 540 points. But crypto markets suffered the most severe hit.
Bitcoin plunged by 10–12%, crashing from its all-time high of $126,250 to as low as $102,000 on Binance futures—its sharpest one-day fall since April. Ethereum sank by 13–15% to $3,637, Solana tumbled by 14%, and other altcoins like XRP and BNB lost over 15%.
CoinGlass and Bloomberg data show that over $19 billion in leveraged positions were liquidated within 24 hours, marking the largest single-day liquidation in crypto history. More than 1.5 million traders were wiped out, with Bitcoin alone accounting for $1.83 billion in losses and Ethereum $1.68 billion. One large investor reportedly shorted both BTC and ETH for a $190 million profit.
| Asset | Pre-Tariff Price (Oct 10 AM) | Low After Announcement | 24-Hour Change | Liquidations |
|---|---|---|---|---|
| Bitcoin (BTC) | $122,000–$126,250 | $102,000 | -8.4% to -12% | $1.83B |
| Ethereum (ETH) | ~$4,200 | $3,637 | -13% to -15% | $1.68B |
| Solana (SOL) | ~$180 | N/A | -14% | $614M |
| XRP | ~$0.65 | N/A | -15% | $432M |
| Total Market | $3.74T | $2.42T | -7–10% | $19B |
The global crypto market lost between $125 and $200 billion in just a few hours, with total capitalization plunging to as low as $2.42 trillion, according to data from CoinMarketCap and CoinGlass.
What’s Really Going On?
The panic aligns with broader macroeconomic fears rather than a single nation’s crypto move. Trump’s tariff escalation rekindles the specter of a full-blown trade war reminiscent of 2018–2019, disrupting supply chains vital for semiconductor, EV, and mining hardware industries—all sectors heavily dependent on China.
Bitcoin and other cryptocurrencies, now more correlated than ever with equities (over 83% correlation), were swept up in the broader market sell-off. Investors fled risk assets in favor of gold, bonds, and the US dollar.
China’s relationship with crypto has been complicated since its 2021 ban on mining and trading. While the government holds seized Bitcoin from criminal cases, reports show local governments occasionally liquidate small portions via private intermediaries. Earlier in April 2025, about 15,000 BTC were reportedly exchanged for gold as part of Beijing’s strategy to diversify away from the US dollar. If the current rumor is true, it could be part of a shift toward “hard assets” amid intensifying US sanctions.
What Investors Should Expect
Short-term volatility is expected to persist as the November 1 tariff deadline approaches. Trump has hinted at possible talks with President Xi Jinping, which could calm markets temporarily if both sides agree to revisit tariff terms. Bitcoin’s technical charts indicate strong support near $100,000, with resistance forming at $118,000.
In the long run, this event illustrates how geopolitical tensions increasingly dictate crypto movements. As the US embraces Bitcoin as “digital gold” and China focuses on real gold, global finance may be entering a new era of economic rivalry defined by assets rather than currencies.
Experts like Edul Patel, CEO of Mudrex, believe the pullback could be a “buying opportunity” for long-term investors looking to accumulate quality assets. However, traders using leverage should remain cautious due to extreme volatility. Diversifying portfolios across BTC, ETH, stablecoins, and gold-backed assets could provide balance in the short term.
Final Thoughts
Despite the sensational headlines, there is still no verified proof that China dumped all of its Bitcoin holdings. The massive market crash appears to be a direct consequence of Trump’s tariff escalation rather than a coordinated move by Beijing. Still, the viral rumor highlights how social media can amplify financial fear faster than ever—turning speculation into global panic within hours.
Investors should focus on verified sources and avoid impulsive decisions during uncertainty. With geopolitics now steering the crypto narrative, volatility may become the new normal.
