On April 7, 2025, the cryptocurrency market experienced an epic crash, with Bitcoin declining over 10% in a single day, and mainstream tokens such as Ethereum falling by 12%-20%. More than 440,000 people across the network were liquidated, resulting in losses exceeding $1.3 billion. This crash was triggered by multiple factors:

The immediate catalyst was the "reciprocal tariff" policy signed by the Trump administration on April 2, which imposed tariffs of 10%-25% on global trading partners, impacting supply chains and causing the U.S. stock market to plunge 4% in a single day, leading to panic selling of cryptocurrencies as risk assets. On a macroeconomic level, the Federal Reserve's decision to maintain interest rates broke the expectation of rate cuts, and a stronger dollar led to massive liquidations in leveraged trading, with liquidation amounts reaching $877 million within 24 hours. Regarding regulatory pressure, the SEC announced it would hold four cryptocurrency regulatory roundtables over the next three months, raising market concerns about rising compliance costs for DeFi and exchanges, accelerating the exit of small and medium projects.

Internal market risks were prominently exposed: A vulnerability at Bybit exchange caused losses of $1.6 billion, with $580 million in Bitcoin being transferred from cold wallets to the exchange, triggering sell-off speculation; on the geopolitical front, the Argentine president's involvement in a cryptocurrency lawsuit and the North Korean hacking incident exacerbated the trust crisis. On the emotional side, the Fear and Greed Index fell to an "extreme fear" range of 22, creating a negative feedback loop of panic discussions on social media.

This crash reveals the high interconnectedness of cryptocurrencies with traditional finance, and in the short term, attention should be paid to the Federal Reserve's policy direction in June and the SEC's regulatory details, while in the long term, it may accelerate the compliance process within the industry.