Disclosure: The views and opinions expressed herein belong solely to the authors and don’t signify 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 firms and merchants utilizing BTC as collateral for loans, computerized liquidation programs ensured earnings in the course of 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 danger administration in risky markets.
Whereas many noticed nothing however confusion, this occasion revealed one thing deeper about how BTC-backed lending features as each a funding instrument and built-in danger administration.
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The financing dilemma: promote or borrow?
Think about you run an organization that holds $1 million value of BTC vaults that had been constructed earlier this yr as a part of a broader stability sheet technique. You bought Bitcoin in April 2025 for roughly $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’d like liquidity to cowl month-to-month working prices resembling payroll, advertising and marketing, and product improvement.
You at the moment are confronted with the traditional query of how you can most effectively finance your small business. 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 strategy offers short-term funding, however requires you to half with costly belongings.
Possibility 2 – Borrow BTC from Treasury
As an alternative of promoting, use your BTC as collateral and borrow Tether (USDT) or fiat by means of a lending platform. As you enhance your mortgage a bit bit each month, the liquidation worth (the extent at which your BTC is robotically bought to repay your mortgage) will step by step enhance.
This worth successfully acts as a cease loss. If BTC falls beneath that worth, the collateral might be robotically 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 in the course of the crash
One dealer used precisely this construction. By early October, their BTC-backed loans reached a liquidation degree of roughly $115,000. When the flash crash occurred on October tenth, an computerized liquidation system was activated close to that degree.
At first look, liquidation sounds unfavourable. However on this case, you really made a revenue. BTC was bought for $80,000 a number of months in the past. I used to be robotically bought for $115,000 earlier than your entire market collapsed, closing out my place at a major revenue.
The system labored precisely as meant. It protected capital, maintained liquidity, and turned what might have been a margin name right into a disciplined exit.
The function 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.
Nonetheless, Chainlink's feed remained round $104,000 to $105,000, reflecting a fairer market degree. This distinction is essential. Through the use of decentralized oracle information, the system prevented pointless liquidations that may very well be attributable to momentary mispricing on one change.
It is a key instance of how automated lending and dependable information feeds can scale back danger 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 good friend.
- Liquidation doesn’t essentially imply loss. In some circumstances, which means that your earnings are robotically locked in.
- Automated execution outperforms handbook counterparts in quick markets.
- Correctly managed BTC Treasuries present protected 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 fitting monetary infrastructure can enhance danger administration.
Disclosure: This text doesn’t signify funding recommendation. The content material and supplies printed on this web page are for instructional 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 educational experience with sensible expertise in constructing high-impact monetary programs. Gleb is broadly recognized for his imaginative and prescient on the intersection of finance and expertise. 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 technology of quick, high-yield, and dependable monetary programs.
