Macroeconomics exceeded expectations: how October 12 changed the trajectory of Bitcoin in 2025

Trade tensions and monetary policy overshadow the commitment to cryptocurrencies. Despite positive rhetoric regarding digital assets, the cryptocurrency market experienced a dramatic reversal in the second half of the year. From at least optimistic expectations at the beginning of 2025, the crypto sector lost approximately $1 trillion in value during the last quarter, effectively erasing all previous gains.

Turning Point: October 6 and 12

Bitcoin reached its all-time high of $126,000 on October 6, sparking a wave of optimism in the market. However, this rally proved fragile. Just six days later – October 12 – news of a 100% tariff on Chinese goods spread, prompting a reassessment of global risks. The result was the largest liquidation wave in history: $19 billion worth of positions were wiped out in 24 hours on the crypto market.

Rachel Lucas, Marketing and Communications Director at one of Australia’s leading crypto exchanges, explains this phenomenon with simple logic: “Crypto assets are risk instruments. They show the best dynamics when investors are confident in economic prospects.” The positive stance of the US administration regarding the sector proved insufficient in the face of trade conflicts and tight monetary policy.

Three structural factors shaping the current decline

Christian Catalini, founder of MIT Cryptoeconomics Lab, highlights three fundamental reasons behind the crash: the first – massive margin liquidation totaling $19 billion in October; the second – growing risk aversion due to US-China trade tensions; the third – potential curtailment of corporate crypto accumulation strategies on company balance sheets.

Experts believe that the crypto market is overly sensitive to macroeconomic narratives. When global confidence diminishes, digital assets are the first to lose attractiveness for investors.

Side effects from the AI sector

Lucas also points to the indirect impact of the downturn in the artificial intelligence sector. Some Bitcoin miners are reconfiguring their energy infrastructure to support data centers and AI applications. The suppressed atmosphere in the tech companies’ AI segment also affects cryptocurrencies through interconnected chains.

Signs of a crypto winter or a natural cycle?

Some analysts express concern about the sector entering a new crypto winter – a period of prolonged stagnation. The last crypto winter (2021-2023) brought the collapse of FTX and a 70% drop in Bitcoin’s value.

However, Lucas relies on historical cycles. She notes that the current decline aligns with the four-year structure of Bitcoin cycles: “Technically, we are in a bear market, but the fact that Bitcoin remains above $80,000 despite all macroeconomic pressures indicates that the market is far from collapse.”

At the current price of $90.81K, Bitcoin shows recovery from the February low, although it remains 28% below the all-time high of $126.08K. This context helps understand that although the anticipated “Trump Rally” did not materialize on the expected scale, macroeconomic factors proved more decisive than the political stance of a single country.