🚨 Bitcoin's Wild Ride on Trump's Remarks
Today Korean Economic News for Beginners | 2025.10.14
0️⃣ Recovery to 175 Million Won After China Tariff Concerns
📌 Crypto Market Shaken by Political Statement, Leverage Liquidations and Investor Sentiment Amplified Volatility
💬 Bitcoin recovered to the 175 million won range after President Trump's 'support China' statement. Bitcoin, which had fallen to the 160 million won range the previous day due to his announcement of imposing 100% tariffs on Chinese products, rebounded more than 9% within a day when Trump issued a conciliatory message saying he would "help China." Major altcoins including Ethereum, Ripple, Solana, and Dogecoin also rose around 9% simultaneously. Binance Coin in particular hit a new high on expectations that former CEO Zhao Changpeng might be pardoned. This sharp swing is analyzed as a result of massive liquidations of leveraged investors and political uncertainty working together.
1️⃣ Easy Explanation
Bitcoin dropped sharply and then recovered within a day. This wild ride shows how sensitive investors are to a single statement from the U.S. President.
Let me explain what happened. President Trump first announced that he would "impose 100% tariffs on Chinese products." This means that the price of goods imported from China would double. Such aggressive trade policy puts pressure on the global economy and also negatively affects risky assets like cryptocurrencies.
Right after this statement, Bitcoin's price fell to the 160 million won range. Investors started selling, thinking "the economy might get tough, so let's get out of risky investments." But the next day, Trump changed his tone and issued a conciliatory message saying he would "help China." This quickly reversed investor sentiment, and Bitcoin recovered to the 175 million won range within a day.
The important concept here is 'leverage.' Leverage is a way to invest with a larger amount than you actually have. For example, if you have 10 million won and use 10x leverage, you can trade 100 million won worth of assets. This means your profits are multiplied by 10, but your losses are also multiplied by 10.
The problem is that when prices start falling, investors using leverage face 'forced liquidation.' Liquidation means the exchange automatically closes your position when losses exceed a certain level. During Bitcoin's sharp drop, many investors were liquidated, which accelerated the decline further. When one person gets liquidated, their selling pressure hits the market, which leads to another person's liquidation - creating a 'domino effect.'
Other cryptocurrencies showed similar movements. Altcoins like Ethereum, Ripple, Solana, and Dogecoin also fell and then recovered along with Bitcoin. Binance Coin had special positive news. Binance's founder Zhao Changpeng is serving a prison sentence in the U.S., and rumors that Trump might pardon him led Binance Coin to hit a new high.
The Korean market is also noteworthy. The 'kimchi premium' appeared, where Bitcoin prices on domestic exchanges were higher than overseas. This signals strong buying from Korean investors. Indeed, trading volume on Upbit surged, showing active participation from domestic investors.
Ultimately, this event shows how much the crypto market can be shaken by a single political statement, and how dangerous leveraged trading can be.
2️⃣ Economic Terms
📕 Leverage
Leverage is an investment method that uses borrowed funds to trade larger amounts than your own capital.
- For example, with 10 million won and 10x leverage, you can trade 100 million won worth.
- When you profit, you get 10 times the gain, but when you lose, you lose 10 times as much.
- In crypto markets, leverage of 100x or more is possible, but the risk becomes extremely high.
📕 Liquidation
Liquidation is when an exchange forcibly closes your position because losses exceed a certain limit in leveraged trading.
- When liquidation occurs, your cryptocurrency is automatically sold at market price.
- During sharp price drops, liquidations happen in a chain reaction, accelerating the decline.
- During this Bitcoin crash, leveraged positions worth several trillion won were liquidated.
📕 Kimchi Premium
Kimchi premium is the price difference when domestic cryptocurrency prices are higher than overseas exchanges.
- It occurs when buying demand from Korean investors is strong.
- The higher the premium, the more it signals overheated domestic investment sentiment.
- Conversely, a kimchi discount (domestic cheaper) indicates weakened investment sentiment.
📕 Altcoin
Altcoin is a term for all cryptocurrencies except Bitcoin.
- Ethereum, Ripple, Solana, and Dogecoin are representative altcoins.
- They have higher volatility than Bitcoin and are heavily influenced by Bitcoin's price movements.
- Each has unique technology or purpose, requiring individual analysis when investing.
3️⃣ Principles and Economic Outlook
✅ Relationship Between Political Statements and Investor Sentiment
Let's analyze why Trump's statement directly impacted the crypto market.
First, because of how trade policy affects global economic outlook. Imposing 100% tariffs on China is not just a trade measure but an issue that could shock the entire global economy. China is the world's largest manufacturing country, and if trade between the U.S. and China is blocked, the global supply chain shakes. When such economic uncertainty increases, investors tend to move money from risky assets like stocks and cryptocurrencies to safe assets (cash, gold, government bonds). Bitcoin's sharp drop right after Trump's aggressive statement resulted from this 'risk-off' sentiment.
Second, cryptocurrencies are particularly sensitive to policy uncertainty. Unlike stocks or bonds, cryptocurrencies trade 24 hours and can be easily bought and sold anywhere in the world. Due to these characteristics, their reaction speed to news is very fast. When Trump speaks in the morning, sell orders come from exchanges worldwide within hours. Also, crypto investors are younger on average than stock investors and share information quickly through social media, so herd mentality works more strongly.
Third, when politicians' statements change inconsistently, market volatility increases further. Trump changed his stance within a day, saying he would "help China." Such rapid position changes confuse investors but can also trigger quick rebounds. Investors thought "the situation might not be as bad as we thought" and started buying again, leading to a sharp rebound. However, if this pattern repeats, the market becomes increasingly volatile and unpredictable.
While political statements' impact on markets may be temporary, repetition makes the market structure itself unstable.
✅ Mechanism and Risks of Leverage Liquidation
Let's examine in detail how leverage liquidation worked during this sharp drop.
First, the structural vulnerability of leveraged trading was exposed. Many investors used high leverage expecting Bitcoin prices would keep rising. For example, suppose an investor with 10 million won bought 100 million won worth of Bitcoin with 10x leverage. If Bitcoin's price drops 10%, they lose 10 million won, their entire principal is gone, and they get liquidated. This time, Bitcoin dropped about 11% from the 180 million won range to 160 million won, and investors using 10x or more leverage were mass liquidated during this process.
Second, the chain reaction of liquidations accelerated the crash. When one investor gets liquidated, their Bitcoin is sold at market price. This pushes the price down further, causing another investor to reach their liquidation threshold. This creates a 'domino effect' where liquidation triggers more liquidation. According to data, about 3 trillion won worth of leveraged positions were liquidated within 24 hours during this crash. This wasn't just individual investor losses but acted as enormous selling pressure on the entire market.
Third, excessive leverage harms not just individuals but the health of the entire market. Markets with high leverage accumulation shake greatly even with small shocks. In a normal market, a 10% correction is natural, but with excessive leverage, a 10% correction expands to a 20-30% crash. This creates an unfavorable environment even for long-term investors. Also, during liquidation, exchanges forcibly dispose of investors' assets, so investors don't even get a chance to recover and losses are confirmed.
Leverage can magnify profits but is a dangerous tool that extremely amplifies market volatility and triggers chain liquidations.
✅ Investment Sentiment and Market Recovery Patterns
Let's analyze why a quick rebound appeared after the sharp drop and what it suggests.
First, excessive drops are seen as bottom-buying opportunities. When Bitcoin fell to the 160 million won range, many investors judged "this is cheap enough" and started buying. Long-term investors especially don't get shaken by short-term news and use the strategy of increasing their positions when prices drop. Also, when Trump's conciliatory statement came out, a sense of relief spread that "we avoided the worst-case scenario," which further strengthened buying momentum.
Second, when liquidation ends, selling pressure disappears. After most leverage liquidations are complete, there are no more forced selling volumes. Then the market naturally finds balance, and when new buying enters, it rebounds quickly. In this case too, after liquidations were concentrated, the market stabilized, and Trump's positive statement became a catalyst for the rebound to start.
Third, the resilience of the crypto market was confirmed once again. Bitcoin has experienced countless sharp drops in the past but has recovered every time. There was a case in May 2021 when it crashed more than 50% due to China's mining ban but reached a new high within 6 months. Because of this historical experience, many investors don't panic during short-term drops but rather use them as buying opportunities. Of course, this isn't always the right strategy, but in crypto markets, the pattern of "rebound after crash" tends to repeat.
Quick rebounds after crashes show market resilience, but this doesn't mean fundamental stability.
✅ Future Outlook and Investment Precautions
Let's summarize the long-term impact this event will have on the crypto market and what investors should be careful about.
First, political uncertainty is expected to continue for some time. The Trump administration's trade policy can keep changing, and the market will shake each time. Also, as the U.S. presidential election approaches, political statements may become more provocative. Therefore, investors need to closely monitor political news and prepare for short-term volatility. It's important to hold some of your portfolio in cash or set clear stop-loss criteria.
Second, it's safe to minimize or not use leverage at all. The people who suffered the most in this event were investors using high leverage. Cryptocurrencies are already very volatile assets, and adding leverage exponentially increases risk. Beginner investors should never use leverage, and even experienced investors should use it minimally. The desire to "make big profits quickly" usually leads to big losses.
Third, maintaining diversified investment and a long-term perspective is important. Rather than concentrating only on Bitcoin, it's better to diversify into multiple cryptocurrencies and also hold other assets like stocks and bonds. Also, rather than being swayed by short-term ups and downs, you should approach with a long-term perspective of 3-5 years or more. Cryptocurrencies continue to develop technologically and institutional adoption is expanding, so there's growth potential in the long term. However, since sharp swings like this can repeat in the short term, invest only amounts you can afford to lose and maintain a relaxed mindset.
Recognizing political risks, leverage dangers, and volatility while approaching cautiously are basic principles of crypto investment.
4️⃣ Conclusion
This Bitcoin crash and rebound vividly demonstrated how quickly the crypto market changes and how sensitively it reacts to external factors. The fact that it crashed more than 10% on Trump's statement and then rebounded nearly 10% the next day means the market is heavily influenced by emotions and sentiment rather than rational analysis.
The biggest lesson is the danger of leverage. Investors using excessive leverage seeking high returns got liquidated, accelerating the entire market's decline. This is a structural problem that doesn't stop at individual losses but destabilizes the entire market. Beginner investors should never use leverage, and even experienced investors should use it minimally.
Political uncertainty is also an element that cannot be overlooked. Trump's trade policy can keep changing, and the market will shake each time. Investors need to carefully monitor political news and establish risk management strategies to prepare for sudden changes.
However, there are positive aspects too. Bitcoin's quick recovery after the crash shows market resilience and expansion. Coins with individual positive news like Binance Coin even hit new highs. This suggests the crypto market isn't just speculation but that its actual ecosystem is developing.
From an investor's perspective, it's important to maintain a long-term view without being shaken by short-term volatility. Invest only amounts you can afford, manage risk through diversification, and it's wise to minimize or not use leverage.
Ultimately, the most important thing in crypto investment isn't technical analysis or market prediction, but risk management and psychological stability. Only investors who can maintain composure without being shaken by sharp swings can succeed in the long term.
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