What Made the Stock Market Crash: Key Triggers Explained

The question of what made the stock market crash is central to understanding both historical and recent financial turmoil. In the fast-evolving world of crypto and traditional equities, sudden crashes are often triggered by a mix of policy changes, speculative hype, and investor sentiment. This article breaks down the core causes behind market crashes, using up-to-date examples and industry insights to help you navigate volatility and protect your assets.

Major Policy Shifts and Their Immediate Impact

One of the most significant triggers for stock market crashes is abrupt changes in government policy. For instance, as of October 2025, U.S. President Donald Trump's tariff announcements have repeatedly caused sharp market swings. According to recent reports, a renewed round of tariffs earlier this month led to a market crash that wiped out over $19 billion in leveraged crypto positions in a single day (Source: Official Market Data, October 2025).

These policy-driven shocks often create a cycle of panic and recovery. When tariffs are announced, markets typically react with fear and uncertainty, resulting in rapid sell-offs. Once the policy softens or negotiations resume, a rebound usually follows. This pattern is not unique to crypto; it also affects traditional stocks, demonstrating how sensitive markets are to headline-driven news.

Speculative Bubbles and the Role of Hype

Another key factor in what made the stock market crash is the formation of speculative bubbles. Recent billion-dollar deals among tech and AI giants have shown how hype can outpace real market value. For example, Nvidia's announcement of a $100 billion investment in OpenAI sent its stock to a record high of $184.55, adding over $200 billion in market cap within an hour (Source: The Kobeissi Letter, September 22, 2025).

Similarly, AMD's stock soared by more than 38% after a major deal with OpenAI, only to cool off as analysts questioned the long-term impact. These rapid surges are often followed by sharp reversals, highlighting the risks of momentum-driven speculation. When deals are based more on excitement than fundamentals, the resulting bubbles can burst quickly, leading to widespread losses.

Closed Financial Circuits and Systemic Risks

Recent trends show that a handful of tech and AI companies can move vast amounts of speculative capital through major partnerships. This creates a closed financial circuit, where money is recycled within the same ecosystem, inflating valuations without necessarily generating new value. As noted by industry observers, this dynamic can give the illusion of infinite growth, but it also increases the risk of a self-made bubble (Source: AdameMedia, October 26, 2025).

When asset prices become disconnected from real economic value, the risk of a sudden crash grows. If underlying deals fail to deliver, the entire mechanism can unravel, causing a rapid and severe market correction. This pattern has been observed in both crypto and traditional markets, emphasizing the importance of understanding the underlying drivers of market movements.

How to Navigate Volatility and Protect Your Assets

Understanding what made the stock market crash is crucial for both new and experienced investors. Here are some practical tips to help you manage risk:

• Stay informed: Monitor official announcements and market data regularly.
• Focus on fundamentals: Avoid chasing hype and evaluate the real value behind deals and partnerships.
• Diversify your portfolio: Spread your investments across different assets to reduce exposure to sudden shocks.
• Use secure platforms: For crypto trading and asset management, choose reliable exchanges like Bitget and secure wallets such as Bitget Wallet.

Common Misconceptions and Risk Warnings

Many investors believe that market crashes are always caused by external shocks or bad news. In reality, internal dynamics like excessive leverage, herd behavior, and closed financial circuits can be just as dangerous. It's important to recognize that not all market movements are rational or based on fundamentals.

Always be cautious of overhyped announcements and short-term rallies. As recent events have shown, even the biggest deals can lead to quick reversals if expectations are not met. Protect your assets by staying vigilant and making informed decisions.

Further Insights and Staying Ahead

By understanding what made the stock market crash, you can better anticipate market shifts and safeguard your investments. For the latest updates, market analysis, and secure trading solutions, explore more with Bitget. Stay proactive, keep learning, and make use of trusted tools like Bitget Wallet to manage your digital assets safely.