I woke up Saturday morning to 47 unread messages in my trading group. Someone had lost their entire portfolio overnight. Another person was asking if Coinbase was hacked because their account showed numbers that didn’t make sense. A third was celebrating buying “the dip of a lifetime” at 4 AM.
October 10, 2025 will go down as the day crypto experienced its largest liquidation event in history. $19 billion in leveraged positions evaporated in hours. Over $500 billion in total market value disappeared. Bitcoin dropped from $125,000 to under $102,000. And memecoins? They got absolutely destroyed.
What started as a Trump tariff announcement turned into a cascade of liquidations that exposed just how fragile the memecoin sector really is.
Trump announced a potential 100% tariff on Chinese imports effective November 1st. Traditional markets tanked immediately. Nasdaq dropped 3.49%, S&P 500 fell 2.71%. But crypto went into freefall because it happened during after-hours trading when liquidity was already thin.
The real damage came from excessive leverage on platforms like Hyperliquid, which handled over half the liquidations. A Binance oracle glitch mispriced collateral assets, triggering cascading liquidations across exchanges. $7 billion was liquidated in a single hour. 1.6 million traders got wrecked.
Dogecoin, the most established memecoin, cratered 50% in minutes before partially recovering. But that was gentle compared to what happened to smaller memecoins. Average drops hit 33% across the board, with many tokens losing 80–99% of their value temporarily.
The vulnerability was obvious. Memecoins rely on hype and leverage, not fundamentals. When forced liquidations started, there was no floor. No institutional buyers stepping in. No underlying utility to justify any price. Just panic selling creating more panic selling.
Tokens that had been riding high on community enthusiasm got shellacked. Retail traders who’d been riding 10x-50x leverage positions saw their accounts go to zero before they could react. The sector that had led the bull market became the poster child for excessive risk.
Memecoins lack the institutional backing that protected Bitcoin and Ethereum. While BTC benefits from ETF inflows that outpaced mining production 7.4x in 2025, memecoins are purely retail-driven speculation. When risk-off sentiment hits, retail disappears first.
The leverage factor amplified everything. Platforms like Hyperliquid saw massive unwinds of long positions in memecoin perpetual futures. Thin liquidity meant small sell orders caused huge price drops, triggering more liquidations, creating a death spiral.
Some traders lost life-changing amounts. The billions wiped out were real money from real people who thought they’d found the next 100x. Instead, they learned why “don’t use leverage on memecoins” is advice that exists.
By October 14, something unexpected happened. Memecoins led the market recovery. Their collective market cap hit $68.8 billion as retail traders bought the dip aggressively. Bitcoin recovered to $115,000, and total market cap climbed back above $4 trillion.
Binance announced $400 million in relief programs for affected traders. BNB Chain added recovery measures totaling $728 million combined. The Fear & Greed Index started ticking upward. Whales who’d been waiting for entries started accumulating
The crash “cleaned out” excessive leverage, resetting funding rates and creating healthier market conditions. What looked like apocalypse on October 10 became a buying opportunity by October 14 for those with capital ready.
This event exposed memecoin vulnerability to external shocks. A Trump tweet about tariffs shouldn’t crater dog coins by 50%, but it did because the entire sector was overleveraged and overextended.
The survivors will be projects with stronger communities and some semblance of utility. Pure speculation plays will face more skepticism. Traders are learning that leverage multiplies losses just as effectively as gains.
For the sector to mature, memecoins need to evolve beyond pure gambling. Some are integrating GameFi elements, others building metaverse features. The days of launching a dog picture and expecting billions might be over.
As the memecoin sector matures post-crash, having robust technical infrastructure and responsible launch practices becomes essential for projects that want to survive the next liquidation event.
The $19 billion liquidation was a brutal reset that disproportionately destroyed memecoins. It exposed the risks of leverage, thin liquidity, and hype-driven valuations. But it also created opportunity for those who recognized the sector wasn’t dead, just overleveraged.
Memecoins bounced back faster than expected, proving retail appetite remains strong. But the next wave will look different. Smarter position sizing, less leverage, more focus on community sustainability.
The crash didn’t kill memecoins. It just killed the overleveraged traders who thought the party would never end.
The $19 Billion Liquidation That Obliterated Memecoins was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.
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