October 10 was no ordinary day in crypto. Yes, Donald Trump “retaliated” after China announced new plans curbing rare earth metal exports. Truth Social, X, that’s classic Trump. The president won’t hesitate to show how mighty the United States is.
The truth of the matter is: News of new tariffs on China was not expected to force a mega drawdown on that thin Friday evening. A -10% drop in Bitcoin would be extreme. However, things quickly went south on that October 10, and after what could be a comparatively “small” trigger, the world’s most valuable coin crashed from over $120,000 to below $105,000 in 15 short minutes.
According to Coinglass, over $16Bn of leveraged positions, long and short, were liquidated on October 10. The sheer size of this liquidation makes October 10 the largest single-day liquidation event in history; a true crypto black swan event.
(Source: Coinglass)
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On the surface, it is easy to blame Trump.
However, digging deeper, Trump had nothing to do with the “other” slump outside of a mild correction that would ordinarily see BTC USD and some of the best cryptos to buy drop -10% max.
There have been theories. Some blame Binance, the world’s largest crypto exchange, and others think this was nothing more than insider trading.
For those who believe the sell-off was due to insider activity, they cite the huge shorts on Bitcoin and Ethereum placed less than an hour on Hyperliquid before the drop.
As 99Bitcoins reported, the trader, allegedly linked to the Trump family, denied all associations and said funds belong to clients.
Others, however, squarely blame Binance. In their view, the exchange exacerbated the drop by reportedly withdrawing liquidity and (un)intentionally amplifying volatility on what is usually a thin Friday evening when traders are preparing for the weekend.
Whether it was a systemic failure or not, traders and market makers, including Wintermute, were wrecked.
An anonymous whale on Binance lost over $450M when his BTC USDT long position was closed. Wintermute lost over $300M. Another hedge fund from China lost over $180M. The list goes on and on.
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To calm down traders and hedge funds, Binance dished out goodies, airdropping BNB to meme coin traders on the Binance Smart Chain.
However, this is not enough. Experts are now expecting a new wave of class action suits that would target market manipulators, exchanges, and even liquidity providers.
