$19B Wiped Out in Crypto's Biggest Liquidation

https://decrypt.co/344038/morning-minute-19b-wiped-out-in-cryptos-biggest-liquidation-ever

by paulpauper • 9 months ago

61 107 9 months ago

exabrial5• 9 months ago

Am I missing something obvious? Bitcoin has moved between 120k <--> 110K pretty much continuously since July.

I don't really see the move Friday as a huge deal (in the scope of the Wild West crypto is), looks like business as usual.

postflopclarity• 9 months ago

it happened really fast so a lot of positions were liquidated automatically by force, rather than voluntarily by the user. that's really the main distinction

Ekaros• 9 months ago

These things happen when too many participants are leveraged... Not that I feel sad for them. They took a gamble where sometimes they do lose...

candiddevmike3• 9 months ago

It's a big deal from the standpoint that tether stepped in, printed ~ a billion USDT over the past three days, and prevented further plunging. Someone should investigate that...

Reminder, if you're invested in crypto long term, you'd better say a prayer every night that Tether is actually backed by ~$180B of liquidity.

scotty794• 9 months ago

Assuming it happened, if Tether didn't de-peg due to this then it was probably the right thing to do. If they printed it and bought BTC in the dip they are massively ahead since BTC already regained a third of what it lost in the wipe.

sidewndr46• 9 months ago

Does anyone actually believe that Tether is backed by anything? I know there are at least a few companies that have to pretend Tether is backed by something. But I can't really believe anyone saying it. It'd be sort of like if someone just declared Madoff never really ran Ponzi scheme. It was just a big misunderstanding.

Furthermore does it even really matter if Tether is backed by anything? My understanding is they've always maintained an absolute veto on any redemption. So tehter could be backed by Trillions in assets and it'd be irrelevant.

ptero2• 9 months ago

Reminder, if you're invested in crypto long term, you'd better say a prayer every night that Tether is actually backed by ~$180B of liquidity.

As a long-term holder of Bitcoin I do not see why I should lose any sleep due to Tether risks. Why should I care even if it de-pegs?

On the liquidation itself: leveraged bets gone wrong will get liquidated, whether the bets were on stocks, currencies, Treasuries, crypto or grain futures. BoJ, for example, regularly makes rapid large buys to shake out leveraged yen speculators. I do not see anything concerning or unusual with this week's crypto shakeout. My 2c.

exabrial5• 9 months ago

tether stepped in, printed ~ a billion USDT over the past three days, and prevented further plunging

Being completely ignorant on all of these, where can I read about this?

bluecalm2• 9 months ago

The wild moves occurred on alt coins, some went down 80%. Mr. President's own World Liberty Financial for example went down from 18c to even 6c in an instant.

exabrial5• 9 months ago

That too seems like business as usual though?

wmf5• 9 months ago

There was a flash crash down to ~$104K that wiped out leveraged traders. Liquidation cascades are relatively uncommon and the last one was in 2021 IIRC.

scotty794• 9 months ago

Yeah, the commotion is a bit silly. "The crash" basically brought the price of BTC to the level it was comfortably at two weeks ago.

I think disproportional media interest in last two weeks of appreciation and "the crash" is a failed attempt to finally kickstart this BTC bull or bear market. Somebody is getting impatient with last two years of steady growth.

factorialboy2• 9 months ago

For long-term holders, this hardly matters.

The real story here is insider trading and corruption by people close to President Trump, who knew, down to the exact minute, when to short BTC and ETH.

BTC, meanwhile, being a scarce asset, will recover as fiat supply increases with time.

thehappypm• 9 months ago

Is insider trading even illegal with bitcoin?

crowbahr• 9 months ago

Yeah insider traders opening new accounts just over 1 day before, putting tens of millions into those accounts as shorts and stopping right before the president's announcement (to the second in some cases) meaning they walked away with hundreds of millions...

It's obvious, it's out in the open, and nobody will prosecute it.

smcleod• 9 months ago

It's not really bitcoin but the huge alt coin market much of which dropped 60%+ in just two hours.

kkfx• 9 months ago

Nowadays many like 100-1000× leverage, with no real stoploss strategy and with significant portion of their capitals.

The pump of ZCash also prove some like to clean their history (nowadays that Monero was attacked to crash Houthis international trades).

It's business as usual for those who know the business, many are newcomers.

josefritzishere• 9 months ago

Biggest crash in the history of crypto. I'm surprised this isn't on network news.

ramesh31• 9 months ago

Biggest crash in the history of crypto. I'm surprised this isn't on network news.

In dollar terms sure, but it's a meaningless blip percentage wise. The NASDAQ shed more than its entire market cap in the 2000s this year in a few days and it went right back up. We are in a fantasy world where numbers don't mean anything anymore.

bdcravens2• 9 months ago

A lot of the value was wiped out from non-Bitcoin, and the percentages weren't the biggest, only the absolute value.

dboreham2• 9 months ago

Why does "orange guy doing random thing" cause Bitcoin to go down in value? I mean, whatever the random thing was, it seems to have nothing whatever to do with Bitcoin.

stavros• 9 months ago

I guess because it's random things that cause anything to go up or down nowadays, so it fits.

candiddevmike3• 9 months ago

Because Bitcoin is far, far more correlated with the stock market than the proponents want to admit. Notice that gold didn't budge, "digital gold" my ass.

When folks get scared, pure speculation instruments like BTC will tank.

liquidise2• 9 months ago

Gold fell on Friday and recovered over the weekend. BTC certainly remains a more speculative asset than physical gold, but the comparison is not as unhinged as you make it sound.

SoftTalker• 9 months ago

Gold has intrinsic value. Bitcoin are just... bits.

bdcravens2• 9 months ago

The same psychological forces that drive the stock market drive crypto. It used to be fairly disconnected, but that ship sailed long ago.

chasebank• 9 months ago

From what I’ve read it’s because there is a massive amount of Chinese investment in US equities and crypto markets.

bluecalm2• 9 months ago

As many assets are held by leveraged players their prices crash when it's difficult to secure future loans at the same price. This is why seemingly random things like central bank of Japan raising rates can cause double digit crash on Nasdaq.

There is nothing to worry about if you are happy to hold the assets long term. It's an opportunity if you have spare cash. It's only a problem for those leveraged players and people who need to sell right now for whatever reason.

DesiLurker• 9 months ago

there were a couple of reasons

1) there is a lot of circumstantial evidence of insider trading before the timing of presidential tariff announcement. further the accounts that traded on hyperliquid DEX were funded 24hours before even the first tweet by the president indicating fore-knowledge.

2) crypto exchanges have a feature called auto-deleveraging which closes long and short positions to 'preserve the solvency & integrity of exchange'. apparently this got kicked in when some of the thinly traded coins just didnt have a market maker & basically floor fell out of price.

3) looks like some screwup happened (likely intentional unknown atm) with the price reporting oracle between decentrralized exchanges like hyperliquid and Centralized exchange used (binance). people are claiming intentional sabotage by binance because they have a competing dex called aster. who knows.

4) leverage play, everybody was levered up because of up-tober expectations. so even small movements wiped out peoples saving.

nroets• 9 months ago

Here's more speculation that the price manipulation was rife:

https://x.com/ElonTrades/status/1977340254047649966

jmyeet3• 9 months ago

There is a prevailing myth that crypto is somehow above or immune to governmental actions. Nothing could be further from the truth.

The US government could mostly destroy the crypto market tomorrow with a policy change. That's all it would take. If the US government came out and said to access SWIFT and the US financial system, any financial institution is not allowed to trade fiat currencies to or from crypto currencies then that's it, it's over.

The real problem with crypto is the biggest proponents of it simply do not understand the financial system. In fact they're almost the opposite: they're proud of their ignorance. They wear it like a badge of honor, like it lets them be a better disruptor. Sometimes, that's true. But for those of us with some understanding of the financial system, we just shake our head as the crypto market relearns the lessons already baked into the financial system.

Here's another myth: currencies were never backed by gold (or silver). The US Dollar has never been 100% backed by any metal. What really backs the US dollar is the US military. Yes, we previously had a soverign promise to exchange dollars for gold but that's just a promise. We saw under FDR how that promise can simply be changed when there was a sovereign currency devaluation.

kapone• 9 months ago

While I mostly agree with you...

The US Dollar has never been 100% backed by any metal.

This is not accurate but the devil is always in the details. What exactly does "backed by" mean? If we mean pre Bretton Woods (1971), then, for all intents and purposes it WAS backed by Gold, not just a promise. The federal reserve could not conjure up fiat dollars on theirs (or anybody else's) whims and fancies.

Pre-1971 US dollars could be freely traded/swapped for gold at any bank at the then rate of 1oz of Gold = $35. This was written in stone.

Of course, then Nixon did what he did in 1971, and as they say the rest is history.

p.s. The Bretton Woods Agreement/system/whatever you wanna call it, came into being in the aftermath of WWII, in 1944. This was [1] essentially an agreement that those 44 countries will use the US dollar (and by correlation, the USD<->gold peg) as long as the (US) powers that be didn't fuck it up.

p.s.2 - A lot of people don't realize that these accords were what established the IMF, and the beginning the World Bank, BIS etc.

So, what happened in 1971 and what did Nixon do?

"On August 15, 1971, President Richard M. Nixon announced his New Economic Policy, a program “to create a new prosperity without war.” Known colloquially as the “Nixon shock,” the initiative marked the beginning of the end for the Bretton Woods system of fixed exchange rates established at the end of World War II." - per US Office of the Historian.

So, yes, things can change due to government actions, and yes Bitcoin and its peers could be rendered worthless in a heartbeat, if the power that be want it.

What really backs the US dollar is the US military Agreed. But as always there's a time factor. This was true around that time, but not so much today in 2025. While the European military assets are not worth talking about, China and Russia both have continued developing those assets and do present an equalizer today. Are they equal to/better/worse than the US military is somewhat of a moot point. They exist. That in itself is the point.

[1] - The Bretton Woods system of monetary management established the rules for commercial relations among 44 countries, including the United States, Canada, Western European countries, and Australia,[1] after the 1944 Bretton Woods Agreement until the Jamaica Accords in 1976. - As per Wikipedia.

HWR_142• 9 months ago

Other than working in the financial industry, is there a way to really understand it? There don't seem to be many credible sources (at a level deeper than the WSJ/Bloomberg).

mindcandy2• 9 months ago

At a logical level, Bitcoin should be decorrelated from stocks. The fundamentals of Bitcoin network adoption and utilization are largely separate and independent.

But, at an emotional level, Bitcoin is considered a high-risk asset. So, whenever fear gets heavy in the fear/greed equation, Bitcoin is one of the first places people pull money out of as they flee to safety. It's also the "High Risk-High Return" spot for folks to plunk their "spare change" when they are feeling safe. So, in practice short term moves in Bitcoin are highly correlated to short term moves in equities.

Meanwhile, if you actually run the numbers, Bitcoin has out performed the SP500 (or even the SP10) by a large multiple over the past decade while having a volatility usually around the median of the SP500-top-10 that everyone is currently betting heavily into. People just have a hard time getting out of linear thinking and so they look at the big dips as short-term linear disasters while on a long-term, logarithmic view they have been rather boring. https://www.reddit.com/media?url=https%3A%2F%2Fi.redd.it%2Fd...

ajross3• 9 months ago

At a logical level, Bitcoin should be decorrelated from stocks

I don't see how you get to that logic. BTC is a speculative growth asset held by the same people who speculate on securities, and for the same reason. In fact by virtue of being "pure" speculation, it should be expected to be even "stockier" than stocks! You don't buy bitcoin to influence corporate governance or derive dividend income. The only reason anyone purchases crypto is to sell it later at a higher price.

So if you need to dump an asset to backstop other debts, it's going to be your crypto wallet you reach for first. It'll crash harder, almost by definition.

KronisLV• 9 months ago

I mean, whatever the random thing was, it seems to have nothing whatever to do with Bitcoin.

I recently reviewed my investments and wrote about it on my blog, curiously around the time when US announced its tariffs around April, pretty much everything dropped, including crypto like BTC and ETH.

dboreham2• 9 months ago

And today we find the real reason for the crypto crash:

DOJ seizes $15 billion in bitcoin from 'pig butchering' scam based in Cambodia

https://www.cnbc.com/2025/10/14/bitcoin-doj-chen-zhi-pig-but...

daft_pink• 9 months ago

Shocker. At least tulip bulbs could be planted.

tantalor• 9 months ago

Fun fact: they're edible too

In addition to the rationing system, the government provided food through soup kitchens in the cities. As the intensity of the famine increased, the reliance on soup kitchens increased. In April 1945, 1.8 million people in the cities were served daily. One pint of soup per person was the normal ration. The quality of the soup deteriorated over time and some people considered it inedible. The caloric content of a soup ration diminished from 483 calories to 268 calories. The soup served was often made from sugar beets, tulip bulbs, and potato peels. Pet dogs and cats were sometimes eaten.

https://en.wikipedia.org/wiki/Hongerwinter

hvb22• 9 months ago

Way of topic but quoting the hongerwinter as a 'fun fact'....

Wow...

drcode2• 9 months ago

Just give us a date/year/etc in which you think the value of bitcoin will go to zero

If you are unable to do that, then you implicitly agree, as pretty much everyone does now, that bitcoin has an intrinsic market value that will remain over an indefinite time horizon

specialist2• 9 months ago

price != value

ASalazarMX3• 9 months ago

Just give us a date/year/etc in which you think the value of bitcoin will go to zero

So you can take advantage of the market? No way, only insiders are allowed to do that.

I could change your question: Do you think possible that the value of bitcoin will go to zero?

If yes, you implicitly agree that it's fueled by speculation and a Ponzi scheme that needs a constant influx of fresh, if boring, fiat currency.

specialist2• 9 months ago

Yes and: Food.

A captain, back from a long voyage, therefore oblivious to the bulb bubble, received his payment served on a plate, then proceeded to eat it.

a13z's continued insistence that bits of data are in fact a "digital asset class" just slays me.

ASalazarMX3• 9 months ago

To play Devil's advocate, regular finance is mostly bits as digital assets. Banks can't turn them into money without going bankrupt. A sizable chunk of the global economy is electrons and ideas.

To parallel with videogames, the dominant game of capitalism has been captured by a small group of griefers using glitches and exploits to win.

grues-dinner• 9 months ago

"Miscommunication" is when you see mineral water on the bill when you thought it was tap water. Being that ignorant of the positions during a trade war that you started and doing it in public on Twitter is more like holding Uno cards face-out during your own game of poker.

Amid the market's downturn on Friday, our view was that the 100% tariff announcement by Trump was a bargaining chip.
After China's statement last night, we believe the odds of Trump's 100% tariff on China going into effect are extremely low.

"Does nothing, wins" is getting a bit out of hand: they're going back in time and winning 26 hours before they even start.

scotty794• 9 months ago

The funniest thing is that BTC is 100k EUR +-5k for some time now and appreciating very slowly and linearly (at the rate about +300% over 2 years).

If you see BTC rising faster when you look at its price in dollars you don't see the appreciation of BTC. You see the decline of the dollar.

lawlessone3• 9 months ago

Thought i was the only one noticing that , people celebrating the rise in dollars they get for it. Then i check the euro price and it hasn't budged.

And it's not like the euro hasn't been inflating..

Is there anything people can actually use to see what's going on ? Gold? eggs?

scotty794• 9 months ago

Currently, after going through the wave of inflation, that swept the world and originated with overprinted pandemic dollars, euro is pretty much back to its historically more or less stable inflation of ~2% per year on average. It doesn't seem that significant, but sure, gold might also be a good indicator for trying to understand where we are. Although, you can't think of it as a unit of value no more than you can think about bitcoin this way. Gold also appreciates like crazy similarly to bitcoin. Especially now, when people feel like recession is basically ensured so they roll back their investments in more risky assets.

jmyeet3• 9 months ago

While it's fascinating to watch crypto bros learn exactly why the financial system is like it is, kinda like the kid eating baking chocolate, that's boring. It happens basically every day.

What's more interesting is how massive hte insider trader problem is already and it's only going to get worse. At some point it's going to undermine the financial markets themselves because nobody is going to trust it. Libertarians might get mad but financial markets, like all markets, require strong regulation to function.

A consequence of the presidential immunity decision is that Trump and his orbiters are allowed to insider trade with absolutely no repercussions. If somebody in his orbit does get in trouble, no problem. Just sell another pardon.

The US control and influence over the global financial system is a key pillar of its global power. As much as we might hear platitudes like "America First", this administration has done more to destroy the global power and influence of the US than any in living memory and it's not even close.

walterbell• 9 months ago

https://www.cryptopolitan.com/hackers-used-binance-to-crash-...

  - Hackers likely exploited a Binance collateral loophole in its Unified Account system to trigger mass liquidations on October 11.
  - Collateral assets USDE, wBETH, and BnSOL crashed sharply, wiping out traders and market makers as liquidation prices relied on Binance’s spot order book.
  - The attack happened between Binance’s oracle update announcement and its implementation, suggesting precise timing and planning.

Binance statement: https://www.binance.com/en/support/announcement/detail/0989d...

sakopov• 9 months ago

There is a thread on X which unravels the short trade placed hours before Trump's statement and linked it to an individual from Hong Kong

https://x.com/eyeonchains/status/1977071983172231507

mrlonglong• 9 months ago

The day Trump announced the tariffs, someone placed an US $100M bet that crypto would crash thirty minutes before the announcement.

They made nearly US $200M profit. Someone in the Trump admin is cashing in, and it's not the first time this has happened.

hitekker• 9 months ago

How could I be able short bitcoin at this point? Asking genuinely but not too seriously.

HWR_142• 9 months ago

Google "ETF short bitcoin". There are some you can just buy like any other publicly traded ticker.

stouset• 9 months ago

Just remember, the market can stay irrational longer than you can stay solvent.

quickthrowman• 9 months ago

CME has futures and micro futures.

csomar• 9 months ago

You do not short assets like Bitcoin. They can go to irrational levels fast and force you into a liquidation. There is a healthy options market for crypto, try that instead.

tim3332• 9 months ago

The article doesn't really explain what happened but a lot of the alt coins were bought with borrowed money. When Trump announced the latest 100% tariffs on China the selling caused a lot of alt coins to fall such that traders were stopped out and their coins sold which caused more drops some as much as 99% in a few minutes. Then things bounced back.

$19B Wiped Out in Crypto's Biggest Liquidation

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