- On 9 October China tightened export controls on rare earths; on the 10th, Trump threatened an additional 100% tariff.
- That night crypto-assets suffered the largest liquidation of leveraged positions in their history.
- Leverage turns a fall into a catastrophe: debt takes away time.
On 9 October 2025, China tightened export controls on rare earths, a group of materials essential to the technology and defence industries. The next day, 10 October, Donald Trump threatened an additional 100% tariff, and the trade conflict between the world’s two largest economies escalated again. That same night, crypto-asset markets had one of their hardest days. Behind the figures there are also people who lost savings, which calls for talking about this kind of risk with respect and without frivolity.
The two events are linked by the climate surrounding them: a sudden escalation that raised risk aversion and set off chain selling. But they also show two different dimensions of the same lesson. One is the fragility of supply chains for critical materials; the other, the danger of operating with debt in volatile markets. Both are within reach of any company or investor who stops to think them through.
A new escalation
Rare earths are a group of materials needed to make magnets, batteries, electronics and defence equipment, which is why China’s tighter controls weighed so heavily. The next day, Trump’s threat of an additional 100% tariff reopened the trade conflict between the two powers.
Rare earths are not scarce by nature, but their extraction and, above all, their processing are highly concentrated in a few countries. That gives whoever controls those stages considerable power over entire industries. When access is tightened, manufacturers of electric cars, wind turbines, electronics or military equipment can see their production threatened. For a company that buys those products, a price rise or a delay in delivery can quickly pass through to its own deadlines and margins.
The biggest crypto liquidation
That night crypto-assets suffered the largest liquidation of leveraged positions in their history. A liquidation occurs when someone who bought with borrowed money sees a fall in price force them to sell, and those forced sales push the price down further still, in a spiral.
The mechanism is simple and brutal. Someone trading with leverage posts collateral and borrows to enlarge their position. If the price moves against them and the collateral is no longer sufficient, the platform closes the position automatically. When many traders are in the same situation, those closures chain together and the move accelerates far beyond what the initial news would justify. That is why falls in leveraged markets can be disproportionate and very fast, and why a secure platform must explain clearly how it handles such situations.
Leverage and patience
Leverage turns a fall into a catastrophe. Someone trading without debt can wait for the storm to pass; someone leveraged cannot. For industrial companies, the episode also served as a reminder that supply chains for critical materials may depend on a few countries, and that this exposure is worth knowing.
For an industrial company, the exercise is to identify which critical materials go into its products, where they come from and what alternatives exist. For an investor, the question is how much debt their strategy carries and what would happen if the market moved sharply against them for a few hours. Surviving a bad night is a precondition for taking advantage of any later opportunity. This is not a recommendation to trade or to stop trading, but an invitation to know the risk before taking it on.
Debt takes away time, and time is what is most needed in a crisis.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
