Crypto Crash: TradFi Events Spark $10B Liquidation

Crypto crash triggered by TradFi events, says Wintermute CEO

Wintermute CEO Evgeny Gaevoy has attributed the recent crypto market crash to traditional finance (TradFi) events, rather than industry participants. According to Gaevoy, over $2 billion in cryptocurrency was liquidated within 24 hours on Feb. 3, following US President Donald Trump's signing of an executive order imposing import tariffs on goods from China, Canada, and Mexico.

Gaevoy noted that during market downturns, crypto traders often blame market makers and institutional participants for deliberately crashing prices to create discount buying opportunities. However, he stated that the last two crypto market crashes were caused exclusively by events outside the crypto ecosystem, such as DeepSeek and Trump's tariffs.

Other analysts, such as Ryan Lee, chief analyst at Bitget Research, also attribute the crypto market crash to macroeconomic concerns over a potential global trade war caused by Trump's tariffs. Bybit CEO Ben Zhou estimated that cryptocurrency liquidations may have exceeded $10 billion, more than five times higher than previous figures.

Following the market correction, some traders alleged that large crypto firms deliberately sold off assets to trigger a market crash and buy at lower prices. However, Wintermute CEO Gaevoy denied these allegations, stating that the firm does not "manipulate prices" or participate in other illegal activities. He added that Wintermute's on-chain activities are easily explained as moving inventory between exchanges that ran out of inventory.

Market makers, which provide liquidity to crypto markets, 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. According to blockchain analytics firm Scopescan, Wintermute sold over 47,000 ETH, followed by Jump Trading (36,000 ETH) and Flow Traders (3,620 ETH).