Crypto Bloodbath: Bybit CEO Confirms $10B Liquidations, Wintermute Blames TradFi

Crypto Market Turmoil: Bybit CEO Confirms Massive Liquidations, Wintermute CEO Blames TradFi Events

Bybit CEO Ben Zhou has confirmed that the crypto market is experiencing massive liquidations, with estimates reaching up to $10 billion. Zhou believes that the actual liquidation figures are significantly higher than reported, largely due to data limitations imposed by major exchanges, including Bybit. In Zhou's words, "During the 2022 FTX collapse, recorded liquidations were 4-6 times worse than publicized," illustrating a trend of underreporting in the volatile crypto market.

Wintermute CEO Evgeny Gaevoy stated that recent crypto market crashes, including a significant $2.24 billion liquidation, were triggered by external traditional finance events, such as new tariffs imposed by US President Donald Trump. This contradicts common suspicions within the crypto community about market makers manipulating the market for personal gain. Gaevoy emphasized the connection between global economic actions and the crypto market dynamics, urging traders to consider these broader impacts.

Analysts also attribute the crypto market crash to macroeconomic concerns over a potential global trade war caused by Trump's tariffs. Investor sentiment deteriorated further after Bybit CEO Ben Zhou estimated that cryptoliquidations may have exceeded $10 billion, more than five times higher than previous figures.

Some traders alleged that large crypto firms deliberately sold off assets to trigger a market crash and buy at lower prices. However, Gaevoy said the firm doesn’t "manipulate prices" or participate in other illegal activities, adding, "We don’t “hunt for stop losses”. Maybe we should – my perception was always that it is a fairly risky business, so we managed quite well without." Market makers, which provide liquidity to crypto markets, ensure that traders can buy or sell assets efficiently. While they were not the cause of the crash, market makers can contribute to selling pressure during market downturns.

In August 2024, five of the top market makers sold a total of 130,000 Ether (ETH) worth $290 million while Ether’s price crashed from $3,000 to below $2,200. Wintermute sold over 47,000 ETH, followed by Jump Trading (36,000 ETH) and