Crypto investors lose billions in biggest-ever liquidation event

As noted in the previous edition of this column, Bitcoin’s (BTC) strongest months have historically been October and November—up an average of 21.89% and 46.02%, respectively. In keeping with this promise, the crypto market started October strong as BTC ran up from about $114,000 (all figures in U.S. dollars unless otherwise specified) on October 1 to a new high of over $126,000 on October 7. Ethereum (ETH), XRP, Solana (SOL), Binance Coin (BNB), and other altcoins also saw impressive runaway gains in the first week of October.

But optimism was quickly, if only temporarily, sucked out of the crypto market as BTC, ETH, and other crypto prices saw a sharp decline from the 10th to the 17th of October before stabilizing. 

As of 28th October, BTC is trading flat, between $113,000 and $115,000—close to the price it was at the beginning of the month.

The chart below shows the ups and downs of the crypto market over the past month, as represented by the Coinmarkcap (CMC) 20 Index, an index of the top 20 cryptocurrencies by market capitalization, excluding stablecoins.

Crypto’s biggest-ever liquidation event—$19.16 billion lost

In a 24-hour period from October 10 to 11, the cryptocurrency market experienced the biggest liquidation event in its history, triggered by Trump’s announcement of a possible 100% tariff on China, in addition to certain export controls.

A “liquidation event” is a short span of time in which traders are forced to close their leveraged crypto positions because of a sharp and sudden fall in prices. 

On October 10–11, a sharp fall in prices forced traders with leveraged long positions in crypto assets to be liquidated because the market went against their bet. These liquidations caused the market to fall further, which, in-turn, triggered additional liquidations in a cascading effect. Here’s how bad it was:

• Over $19 billion of leveraged positions in the crypto market were liquidated
• Of that $19 billion, approximately $16.7 billion were long positions—bets that the market would move higher
• An estimated 1.6 million traders were were liquidated across crypto exchanges and platforms
  

During the fall in prices from October 7 to 17, BTC fell over 17% (from about $126,000 to just over $104,000) and ETH fell over 21% (from about $4,700 to about $3,700)

For historical context, here are the five largest liquidation events in crypto market history, according to coinglass.com

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Should the liquidation scare you?

Was the October liquidation event a long-term buying opportunity or a sign of more turbulence to come? There’s no way to know for sure, but here is one way to answer the question: 

• Short term investors who were hoping for a bumper end-of-year rally may do well to be cautious because they don’t have time on their side to ride the ups and downs of the market without selling their positions in a panic. 
• For long-term investors who believe that the price of BTC could reach $500,000 to $1,000,000 over the coming five to 10 years, the drop to $104,000 certainly seems like a good opportunity to buy the dip.
  

Canadian crypto exchange is fined $177 Canadian dollars by FINTRAC.

If you’re a crypto investor in Canada or are thinking about dipping your toes in the market, it pays to choose your crypto exchange carefully so you’re not being taken advantage of, falling prey to a scam, or supporting a company involved in illegal activity. 

Canadian crypto exchange Cryptomus was fined a whopping CAD$177 million by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). FINTRAC found over a thousand instances where Cryptomus did not adequately report transactions and crypto wallets with ties to serious criminal activity. While the crypto market is a lot more mature and well regulated than it was just five years ago, it unfortunately remains a hotbed of financial scams and other criminal activity.

To protect themselves and to promote the use of crypto in Canada for legal purposes, Canadian crypto investors should know that crypto exchanges in Canada are regulated by the Canadian Securities Administrators (CSA), the regulatory body responsible for harmonizing securities regulation across the thirteen provinces and territories. 

On its website, the CSA provides a list of crypto platforms authorized to do business with Canadians and those banned in Canada. Canadian crypto investors would be well advised to go through both lists before they decide which platform to use.

Crypto price swings are common

Cryptocurrencies including BTC, ETH, XRP, SOL, BNB and others are speculative and highly volatile assets subject to significant price movements. Even stablecoins, which are seemingly “safe,” may be risky if not adequately backed by real-world assets.

Investing in bitcoin and other crypto coins carries significant market, technological, and regulatory risks. Invest in crypto only if it aligns with your broader investment goals, time horizon, and risk profile, and always stay vigilant about crypto scams.

Read more about crypto:

• Will bitcoin crash in 2025?
• Bitcoin tops USD$100,000 for the first time
• Price of bitcoin hits new high after Trump victory, and more crypto news
• How to protect your crypto from hacks

About Aditya Nain

Aditya Nain is an author, speaker and educator who writes about Canadian investments, personal finance and crypto. He has co-authored two books and taught at universities for 12 years.

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