Regulatory Approval Fails to Halt Crypto's $200 Billion Plunge
- Cryptocurrencies lost $200B in October 2025 as Bitcoin fell below $112,000 amid regulatory uncertainty and derivatives liquidations. - Derivatives crashes erased billions, with top 50 cryptos recording double-digit losses and Ethereum leading the decline. - SEC's crypto ETF approval failed to offset bearish sentiment as macroeconomic risks and dollar strength deepened the selloff. - Industry consolidation (Naver Financial's Upbit acquisition) and Google's crypto-linked AI deal emerged amid ongoing market
In early October 2025, the cryptocurrency market saw a steep decline, wiping out $200 billion from its global market value as
The downturn intensified following a collapse in the derivatives market, where forced liquidations wiped out billions. All of the top 50 cryptocurrencies suffered double-digit losses within a matter of hours, with
Regulatory shifts were also a factor. The U.S. Securities and Exchange Commission (SEC) gave the green light to broad listing rules for crypto ETFs, a move some analysts called a “floodgate” for institutional involvement. Still, this regulatory progress coincided with a market slump, as investors prioritized short-term risks over long-term changes. Steve Feinour of Stradley Ronon remarked that the new rules “significantly lower the hurdles for launching crypto ETFs,” especially for assets like Ethereum and
Broader economic pressures added to the selloff. Mixed U.S. inflation figures and worries about persistently high interest rates curbed risk-taking, while geopolitical tensions in major markets made investors more cautious. The strong U.S. dollar and a wave of expiring Bitcoin options contributed to a bearish mood. On September 22 alone, liquidations totaled over $631 million, with Ethereum making up $182 million of that sum Invezz [ 5 ]. Analysts cautioned that Bitcoin’s inability to surpass $117,000 could indicate a looming “death spiral,” further supported by a rising wedge pattern on weekly charts Invezz [ 5 ].
Opinions among traders are split regarding what comes next. Some see the pullback as a healthy pause before another rally, while others warn of more downside risk. For example, the Ethereum options market reflected a shift, with call options regaining value as traders positioned for a possible recovery Coinpedia.org [ 4 ]. Binance founder Changpeng Zhao (CZ) suggested the market has yet to enter a “true bull market,” though his remarks were met with doubt as Bitcoin struggled to break through key resistance levels Coinpedia.org [ 4 ].
The wider financial industry is also adjusting. Naver Financial’s purchase of Upbit, South Korea’s largest crypto exchange, demonstrates the increasing overlap between digital assets and traditional finance. At the same time, Google’s $3 billion investment in AI infrastructure with Fluidstack—accompanied by a 5.4% equity stake in Cipher Mining—shows renewed interest in crypto-related high-performance computing. However, these positive developments have not yet reversed the prevailing bearish mood.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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