Disclosure: The views and opinions expressed herein belong solely to the authors and don’t symbolize the views and opinions of crypto.information editorials.
On October 10, 2025, Bitcoin (BTC) plummeted from about $122,000 to $102,000 in lower than an hour. This was one of many largest liquidation occasions in crypto historical past, with over $19 billion of leveraged positions worn out throughout exchanges. Some merchants watched in disbelief as BTC briefly dipped beneath $100,000, then recovered hours later.
abstract
- On October 10, 2025, Bitcoin fell from about $122,000 to about $102,000 in lower than an hour, erasing greater than $19 billion in leveraged positions, however briefly fell beneath $100,000 earlier than recovering.
- For corporations and merchants utilizing BTC as collateral for loans, computerized liquidation techniques ensured income throughout the crash and maintained liquidity with out promoting.
- The significance of decentralized information: Chainlink’s oracle pricing prevents pointless liquidations by offering unbiased market references and demonstrates how dependable information feeds improve threat administration in unstable markets.
Whereas many noticed nothing however confusion, this occasion revealed one thing deeper about how BTC-backed lending capabilities as each a funding instrument and built-in threat administration.
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The financing dilemma: promote or borrow?
Think about you run an organization that holds $1 million price of BTC vaults that have been constructed earlier this 12 months as a part of a broader steadiness sheet technique. You bought Bitcoin in April 2025 for about $80,000 per coin, contemplating it each a retailer of worth and a diversification of your money reserves. Whereas we’re bullish for the long run, we want liquidity to cowl month-to-month working prices akin to payroll, advertising, and product growth.
You are actually confronted with the basic query of tips on how to most effectively finance what you are promoting. There are two choices:
Possibility 1 – Promote a few of your BTC each month
This provides you money, however reduces your BTC publicity and future upside potential. Suppose you promote BTC each month on the following worth:
This method offers short-term funding, however requires you to surrender useful property.
Possibility 2 – Borrow BTC from Treasury
As a substitute of promoting, use your BTC as collateral and borrow Tether (USDT) or fiat via a lending platform. As you enhance your mortgage somewhat bit each month, the liquidation worth (the extent at which your BTC is routinely bought to repay your mortgage) will regularly enhance.
This worth successfully acts as a cease loss. If BTC falls beneath that worth, the collateral can be routinely liquidated. This construction lets you proceed investing whereas utilizing your BTC holdings as working capital, turning long-term confidence into short-term liquidity.
what occurred throughout the crash
One dealer used precisely this construction. By early October, their BTC-backed loans reached a liquidation stage of roughly $115,000. When the flash crash occurred on October tenth, an computerized liquidation system was activated close to that stage.
At first look, liquidation sounds damaging. However on this case, you really made a revenue. BTC was bought for $80,000 a couple of months in the past. I used to be routinely bought for $115,000 earlier than your complete market collapsed, closing out my place at a major revenue.
The system labored precisely as supposed. It protected capital, maintained liquidity, and turned what might have been a margin name right into a disciplined exit.
The position of oracles: Chainlink information issues
The liquidation relied on Chainlink’s oracle pricing, which aggregates information from a number of main exchanges to create a dependable market common. Throughout the crash, BTC briefly fell beneath $100,000 on some exchanges, particularly these with skinny order books.
Nevertheless, Chainlink’s feed remained round $104,000 to $105,000, reflecting a fairer market stage. This distinction is essential. By utilizing decentralized oracle information, the system averted pointless liquidations that may very well be attributable to short-term mispricing on one trade.
It is a key instance of how automated lending and dependable information feeds can cut back threat even in quickly altering markets.
Classes discovered from October’s flash crash
The occasions of October tenth reminded everybody that leverage in cryptocurrencies is each highly effective and harmful.
However we additionally confirmed that correctly structured asset-backed financing can flip volatility into your pal.
- Liquidation doesn’t essentially imply loss. In some instances, which means your income are routinely locked in.
- Automated execution outperforms handbook counterparts in quick markets.
- Correctly managed BTC Treasuries present secure entry to liquidity even in excessive situations.
The October 2025 crash was greater than only a market shock. This was a real-world stress take a look at of how the precise monetary infrastructure can enhance threat administration.
Disclosure: This text doesn’t symbolize funding recommendation. The content material and supplies revealed on this web page are for academic functions solely.
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Gleb Kurovsky
Gleb Kurovsky He’s a number one fintech innovator and chief digital officer at Luminary Financial institution, specializing in blockchain, AI, and funds. With eight years of expertise in finance, together with a tenure as chief economist at a central financial institution and a PhD at EPFL, one of many world’s main technical universities, Gleb combines deep tutorial experience with sensible expertise in constructing high-impact monetary techniques. Gleb is broadly identified for his imaginative and prescient on the intersection of finance and know-how. A finalist within the Weighing Video games World Econometrics Championship, he continues to form the way forward for digital finance by exploring the programmability of cash and constructing the following era of quick, high-yield, and dependable monetary techniques.
