Family, who understands! Bloomberg's recent 'Bitcoin annual decline warning' is more timely than the winter cold wave, as if not shouting 'bury Bitcoin' means the KPI for the end of the year can't be completed 🤣 This time they caught a new angle: 'the first annual decline without major bans and obvious scams triggered', and they specifically mentioned 'the liquidation of several billion dollars on October 11 is not considered a scam'. As someone who has been in the crypto space for eight years, I have to say: this report seems objective, but it actually misses the point; it is precisely the 'lack of clear triggers' that indicates the current market issues are more complicated than expected!
First, let's clarify a fact: Bloomberg's 'billions of dollars in liquidation' is purely a conservative estimate. The reality is that on October 11th, the entire crypto market staged a 'vanishing liquidity act,' with cumulative liquidation amounts approaching 20 billion USD. Bitcoin plummeted 15% within 20 minutes, and altcoins fared worse, with many currencies dropping over 80% within 5 minutes, and some assets even being smashed down to nearly zero. This is not a scam at all, but rather an inevitable explosion in the crypto market due to 'excessive leverage + macro resonance.' I will break down two core insights for you; once you understand them, you will grasp the essence of this decline.
The first insight: the 'death spiral' behind the liquidation is not a scam, but a structural flaw in the market. That day I connected with several market maker friends, and their exact words were: 'the system directly entered paralysis mode.' The core issue lies in the combination of the 'automatic deleveraging (ADL)' mechanism and the sudden drop in liquidity. Simply put, there were so many leveraged positions in the market that it was absurd. In 2025, the average leverage ratio of the entire crypto derivatives market reached 6.2 times, with over 90% of positions being high-leverage operations. When the news of China's rare earth export restrictions on October 9 and Trump's tariff policy on China on October 10 hit, the market panicked for a moment, with Bitcoin falling from 121,000 to 117,000, which then triggered the first wave of ADL liquidation.
Even more fatal is that at the beginning of the liquidation, the liquidity of major platforms was suddenly drained. Market makers recalled that the orders on the order book just disappeared, and they couldn't find counterparties for closing positions. Some leading platforms even experienced situations where 'users could not place orders during the liquidation period.' This created a vicious cycle: a decline triggers liquidation → liquidity disappears leading to inability to close positions → forced to transact at extremely low prices → further driving down prices → triggering more liquidations. Therefore, the 1011 incident is not a scam, but the 'self-destruction' of a high-leverage market, an inevitable cost of its wild growth.
The second insight: the annual decline without bans or scams precisely exposes Bitcoin's 'fatal flaw.' Bloomberg only saw 'no obvious triggers' but failed to clarify the core logic behind it, namely the 'voting with their feet' of macro funds and the 'implicit tightening' of regulation. In 2025, the global financial market was a typical 'two extremes' scenario, with gold up 65%, silver up 130%, and both US and A-share markets strengthening. These traditional assets were backed by real economic or policy dividends. And Bitcoin? The Federal Reserve maintained high interest rates, with the real yield on 10-year US Treasuries soaring to 4.8%, and the returns on risk-free assets directly caused Bitcoin's 'digital gold' narrative of being a safe haven to collapse, prompting funds to start fleeing madly.
More critically, the 'tightening' of global regulation has been continuously increasing, just without any large-scale bans that make big news. The EU's (Crypto Asset Market Regulation) full implementation has forced thousands of small projects to exit; the ongoing classification dispute by the SEC regarding crypto assets makes institutions hesitant to increase their positions; several regions in Asia have either raised trading taxes or tightened platform scrutiny, directly reducing market liquidity by 30%. This type of 'boiling frog' regulatory tightening, coupled with a macro liquidity retreat, is the real driving force behind Bitcoin's annual decline, more difficult to cope with than a single ban or scam.
Let's talk about personal opinions, neither praise nor blame: this decline is not the beginning of a bear market, but rather a necessary phase for the market's 'deleveraging and bubble bursting.' Bitcoin has fallen from its peak of 125,000 to now, essentially digesting the fervor brought by the institutional ETF in early 2025, returning to a more rational pricing range. For ordinary investors, what should be done now is not to buy the dip, but to stay away from high leverage. On 1011, even professional market makers lost 20%-30%, and some aggressive teams even went bankrupt. Retail investors betting on leverage with real money is no different from sending themselves to the slaughter.
To be honest, Bloomberg's 'burial theory' is just something to look at; the crypto market has never relied on mainstream media reports to survive. I will continue to track two signals: first, the capital flow of Bitcoin ETFs, and second, changes in the Federal Reserve's interest rate policy. Everyone can also discuss in the comments section: on the day of the 1011 liquidation, were you a participant or an observer? Did you encounter platform delays or issues placing orders at that time? Follow me.
