Rich by Coin

Tom Lee, chairman of Bitmine, asserts that the October 11 deleveraging event triggered the bear market and had a larger impact than the FTX collapse, driven by a pricing loophole on a trading platform that set off a cascade of automated liquidations. The event wiped out more than two million accounts globally, destroyed one-third of market makers, and severely damaged balance sheets across venues, leaving the ecosystem in a limp. OKX CEO Star later noted that hundreds of billions of dollars were liquidated on October 11, and OKX observed a fundamental shift in the microstructure of the crypto market from that date. Industry insiders view the losses as possibly more severe than the FTX collapse.

Star identifies Binance’s limited-time promotion offering USDe a 12% annualized yield and allowing it to be used as collateral without practical restrictions as a root cause, with USDe characterized as a tokenized hedge fund product rather than a low-risk money market fund. Tom Lee, chairman of Bitmine, argues that the October 11 deleveraging event triggered the bear market and may have had a larger impact than the FTX collapse, driven by a pricing loophole on a trading platform that set off a cascade of automated liquidations. The episode wiped out more than two million accounts globally, destroyed one-third of market makers, and severely damaged balance sheets across venues, leaving the ecosystem in a limp. OKX CEO Star later noted that hundreds of billions of dollars were liquidated on October 11, and OKX observed a fundamental shift in crypto market microstructure from that date.

Industry insiders view the losses as possibly more severe than the FTX collapse, with Star citing Binance’s limited-time promotion offering USDe a 12% annualized yield and allowing it to be used as collateral without practical restrictions as a root cause, with USDe described as a tokenized hedge fund product rather than a low-risk money market fund. Analysts say the evolving dynamics could constrain liquidity for years, shaping pricing and risk controls across venues. The market will require ongoing monitoring of platform design and collateral practices to gauge the durability of the downturn.