Crypto Market Makers Wiped Out – Blame Binance & a Glitch 🌋💸

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Imagine, if you will, a vast digital savannah where traders roam like majestic, if slightly delusional, beasts. They wear capes labeled “DEGEN” in glittery Comic Sans, riding leveraged trading positions like mechanical bulls fueled by Red Bull and hubris. And then – poof – a third of them vanish. Not gently. Not with a farewell party. More like someone unplugged the entire universe during a particularly intense blockchain solitaire game.

So says Mike Novogratz, CEO of Galaxy Digital and professional watcher-of-things-going-very-wrong, in what can only be described as the most dramatic financial podcast since someone tried to explain NFTs to their grandmother. Speaking on the premiere episode of “All Things Markets” (not to be confused with “All Things Margaritas,” which would’ve been far more useful), Novogratz revealed that October 10th wasn’t just a market dip – it was a full-on digital extinction event.

“We had a flash crash,” he said, as if describing a meteor strike rather than a financial anomaly, “and it did a lot of damage to the fabric of the market.” Like a rogue seamstress with scissors, something tore through the delicate silk of crypto’s illusion of stability. On platforms like Hyperliquid – which sounds more like a brand of futuristic mouthwash than a trading venue – approximately 30% of market makers were “zeroed.” That’s finance-speak for “turned into digital confetti.”

Anthony Scaramucci, eternal optimist and apparent victim of interdimensional wealth traps, nodded sagely. “I know I have a trap door on my portfolio,” he mused. One moment he’s strolling through his living room, feeling fantastic – possibly even humming a show tune – and then – ker-thunk – the floor gives way, and he’s plummeting into the basement of financial despair. Again. It’s like a sitcom written by Warren Buffett on a particularly gloomy Tuesday.

So, who pressed the self-destruct button? 🤔 According to Novogratz, the villain of the piece was not a rogue AI or a disgruntled intern – no, it was a humble oracle at Binance. Not the kind that whispers prophecies at Delphi, but a digital one that, on that fateful day, apparently googled “what is price?” and got a very wrong answer.

This mispriced synthetic stablecoin like it was on sale at a garage sale run by gremlins. Suddenly, people started getting stopped out. Then liquidated. Then vaporized. The dominoes fell through levered perpetual futures on platforms like Hyperliquid and Uniswap – places where logic goes to die and leverage reigns supreme.

And in case you were wondering: perpetual futures are not normal futures. They’re like futures on espresso shots – jittery, dangerous, and capable of making you lose all your money while screaming “I’m fine!” as you spiral toward bankruptcy. Arthur Hayes, the mad architect of this chaos (formerly of BitMEX), invented a system where longs get liquidated and paired against shorts like tragic lovers in a Greek tragedy. Except instead of dying honorably, you’re just… gone. And your opposite number on another exchange? Tough luck. 🤷‍♂️

“Crypto investors call themselves degens with pride,” Novogratz noted, which is like being proud of being allergic to common sense. These are people who don’t want 10% returns – they want to turn one Bitcoin into fifteen while juggling chainsaws. On a unicycle. In a hurricane.

Is Recovery Possible or Are We Doomed?

After the carnage, the market lost both liquidity and, more tragically, a lot of retail “punters” who lost their entire “stack.” That’s finance-speak for “savings, hopes, and maybe a down payment on a tiny house that’s now just a dream.”

Novogratz, ever the realist (or pessimist in denial), admitted he thought Bitcoin would hold at $90,000. Instead, it plunged to $80,000 – the “maximum pain point,” a place where even stoic traders start whimpering and checking if they can barter their GPU for canned beans.

XRP hit $1.80. Solana tapped out at $125. The pain was universal. The screams were localized. The charts? A downward spiral worthy of a Hitchcock film.

But wait! There’s hope! Or at least something resembling hope. The rebound, Novogratz claims, isn’t due to renewed faith in decentralization, but because the Fed is about to flood the world with so much liquidity it’ll make your average hot tub look underhydrated. Rates are heading toward 2% in 16 months. Inflation will creep up. Real returns? Negative. Which is great news if you’re holding hard assets – or, you know, moon rocks.

Meanwhile, early Bitcoin OGs are cashing out like it’s the last day of a Black Friday sale, dumping $9 billion worth of BTC – that’s one-third of all IBIT inflows for the year. New money entering via ETFs? Meets old money sprinting for the exits like the building’s on fire. Short-term chaos. Long-term healthy. Like your colon after a juice cleanse.

Most importantly, crypto is growing up. 🍼 It’s no longer just a story about decentralizing the world and overthrowing banks while sipping artisan kombucha. Now, people want to see what it actually does. Some token ecosystems make logical sense. Others feel like they were dreamed up during a fever dream at a blockchain-themed summer camp.

the market is like Humpty Dumpty after a particularly bad fall. All the king’s horses and all the king’s men (and all the oracles in Binance) can’t quite put it back together yet. But the tides are turning. Liquidity is coming. The degens are licking their wounds. And Bitcoin, resilient little thing that it is, is currently trading at $91,115 – which is either a comeback story or the calm before the next trap door opens. 🪤

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2025-11-28 04:20