Worst Liquidation Event in Crypto History: Jonathan Man on What Happened and How

On October 11, 2025, a significant liquidation event in the crypto market led to an estimated loss of over $20 billion. Jonathan Man, a portfolio manager at Bitwise, described the event as the worst in crypto history, which saw bitcoin experiencing a rapid 13% drop within an hour. The rapid decline wiped out approximately $65 billion in open interest, reverting market positions to levels last recorded in July. Long-tail tokens faced larger losses, with some dropping dramatically before bouncing back. Man noted that as liquidity providers withdrew, organic liquidations became ineffective, necessitating emergency measures like auto-deleveraging at certain exchanges. He highlighted the robustness of DeFi protocols during this turmoil, suggesting that hardcoded mechanisms limited cascading effects. Despite significant market disruptions, trading strategies adapted, and the market found firmer footing by the weekend, providing opportunities for traders with available capital. Final reflections indicate that while operational risks were prominent, most major trading teams navigated the event without catastrophic losses.

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