Bitcoin News Today: Centralized Chaos, DeFi Resilience in $19B Crypto Crash

Source: [1] The Largest Ever Crypto Liquidation Event Wipes Out 6,300 Wallets (https://www.coindesk.com/markets/2025/10/11/largest-ever-crypto-liquidation-event-wipes-out-6-300-wallets-on-hyperliquid) [2] What Really Triggered the Largest Crypto Crash in History (https://yellow.com/news/what-really-triggered-the-largest-crypto-crash-in-history-unpacking-the-dollar19b-liquidation-nightmare-of-october-10-2025) [3] Crypto's $19 Billion Liquidation Explained (https://www.ccn.com/education/crypto/cryptos-19-billion-liquidation-explained-trump-china-tariff-leverage-crash) [4] Binance Offers Compensation After $19B Crypto Crash (https://finance.yahoo.com/news/binance-offers-compensation-19bn-crypto-173813630.html)

The cryptocurrency market experienced its largest single-day liquidation event on October 10, 2025, with over $19 billion in leveraged positions erased, according to data from CoinGlass. The sell-off, triggered by U.S. President Donald Trump's announcement of 100% tariffs on Chinese imports, caused Bitcoin (BTC) to plunge from $122,000 to $102,000 within hours, while Ethereum (ETH) dropped 25%. Over 1.6 million traders were liquidated, with 6,300 wallets in the red and 205 losing over $1 million each.

The collapse was exacerbated by high leverage and thin liquidity in derivatives markets. On Hyperliquid, 1,000 wallets were fully liquidated, and the platform's top 100 traders collectively gained $1.69 billion from short positions, while the largest loser, "TheWhiteWhale," lost $62.5 million. A whale on Hyperliquid profited $190 million by shorting BTC and ETH before the crash, raising speculation about insider knowledge.

Market structure vulnerabilities amplified the crisis. Order books on centralized exchanges like Binance and Bybit collapsed as algorithmic market makers withdrew liquidity, triggering cascading liquidations. DeFi protocols, however, processed record volumes without disruptions, with Uniswap handling $10 billion in trading and Aave managing $180 million in collateral liquidations. Binance acknowledged system failures during the turmoil and announced compensation for losses directly caused by its platform.

Bitcoin stabilized at $112,000 by October 11, but the broader market remained volatile. Analysts noted that the event, surpassing the 2020 and 2022 crashes, exposed the fragility of leveraged positions and the need for improved risk management. Despite the turmoil, institutional investors viewed the dip as a buying opportunity, with BlackRock reportedly accumulating 21,180 BTC during the selloff.

The crash also highlighted the role of geopolitical risks in crypto markets. The U.S. government shutdown delayed key economic data, compounding uncertainty, while Trump's tariff threats reignited fears of a trade war. Experts warned that further volatility could follow if BTC breaks its $100,000 support level.

In the aftermath, funding rates normalized, and stablecoins like USDe recovered from depegging, though DeFi TVL dropped 15%, exposing overleveraged synthetics. The event underscored the need for robust infrastructure and prudent leverage use, with some analysts viewing the liquidation as a necessary correction to reset the market for long-term growth.