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On October 10, 2025, Bitcoin (BTC) fell sharply, from around $122,000 to $102,000 in no longer up to an hour. It used to be one in all the largest liquidation events in crypto historic past, wiping out bigger than $19 billion in leveraged positions across exchanges. Some traders watched in disbelief as BTC temporarily dipped beneath $100K sooner than recovering hours later.
- On October 10, 2025, Bitcoin dropped from ~$122K to ~$102K in beneath an hour, wiping out $19B+ in leveraged positions, with a temporary dip beneath $100K sooner than recovering.
- Corporations and traders the usage of BTC as collateral for loans maintained liquidity without promoting, with automated liquidation systems locking in income all through the smash.
- Importance of decentralized data: Chainlink oracle pricing refrained from pointless liquidations by offering a excellent market reference, showing how official data feeds toughen possibility administration in volatile markets.
Whereas many noticed simplest chaos, the tournament published one thing deeper about how BTC-backed lending can work as each a financing instrument and a constructed-in invent of possibility administration.
The financing jam: Sell or borrow?
Imagine you’re working a company that holds a BTC treasury rate $1 million, constructed up earlier within the 365 days as a part of your broader steadiness-sheet strategy. You sold Bitcoin in April 2025 at about $80,000 per coin, seeing it as each a store of price and a diversification of cash reserves. You’re bullish long-time duration, however you aloof need liquidity to quilt monthly operational costs — payroll, marketing and marketing, product construction, and heaps others.
You now face a conventional ask: tricks on how to fund operations most efficiently? You should agree with two choices:
Option 1 – Sell a part of your BTC every month
That presents cash however reduces your BTC exposure and future upside. Sing you sell your BTC every month on the next prices:
| Month | BTC designate ($) |
| Might maybe well maybe additionally fair | 95,000 |
| June | 104,000 |
| July | 107,000 |
| August | 108,000 |
| September | 114,000 |
This suggests presents you immediate-time duration funding however forces you to part with appreciating property.
Option 2 – Borrow against your BTC treasury
In preference to promoting, you utilize your BTC as collateral and borrow Tether (USDT) or fiat through lending platforms. Every month, you extend your loan a bit, and your liquidation designate — the degree the assign BTC would automatically be supplied to repay the loan — step by step rises.
That designate successfully acts as a discontinue-loss: if BTC falls beneath it, the collateral is liquidated automatically. This structure lets you pause invested while the usage of your BTC holdings as working capital — turning long-time duration conviction into immediate-time duration liquidity.
What came about all through the smash
One vendor weak this true structure. By early October, their BTC-backed loan had a liquidation degree of around $115,000. When the October 10 flash smash hit, the automated liquidation device precipitated advance that degree.
At the starting up seek for, liquidation sounds negative. But in this case, it undoubtedly locked in income — the BTC had been bought months earlier at $80K. Promoting automatically at $115K closed the converse with a mighty develop sooner than the broader market fall down.
The device worked exactly as supposed. It protected capital, preserved liquidity, and became what would possibly agree with been a margin call into a disciplined exit.
The role of oracles: Chainlink data issues
The liquidation relied on Chainlink oracle pricing, which aggregates data from quite loads of primary exchanges to invent a official market moderate. In each place in the smash, some exchanges — in particular these with thinner tell books — temporarily confirmed BTC beneath $100K.
However the Chainlink feed stayed closer to $104–105K, reflecting a fairer market degree. This distinction issues. By the usage of decentralized oracle data, the device refrained from pointless liquidations that would agree with been precipitated by one alternate’s non permanent mispricing.
It’s a key example of how automated lending and official data feeds can decrease possibility, even in like a flash-intriguing markets.
Lessons from the October flash smash
The October 10 tournament reminded all people that crypto leverage is mighty — and harmful.
But it for sure also confirmed that successfully structured asset-backed lending can turn volatility into an ally:
- Liquidations don’t continuously mean losses — typically they mean income locked in automatically.
- Computerized execution can outperform handbook reactions in like a flash markets.
- Smartly-managed BTC treasuries can access liquidity safely, even in gruesome stipulations.
The October 2025 smash used to be no longer staunch one other market shock. It used to be a true-world stress take a look at of how steady financial infrastructure can give a take to possibility administration.
Disclosure: This text would no longer symbolize funding advice. The squawk material and materials featured on this page are for educational applications simplest.
Gleb Kurovskiy is a main fintech innovator and Chief Digital Officer at Luminary Financial institution, specializing in blockchain, AI, and payments. With eight years of skills in finance, along with a tenure as Lead Economist on the Central Financial institution, and a PhD from EPFL, one in all the realm’s high technical universities, Gleb combines deep academic skills with fingers-on skills in building excessive-influence financial systems. Gleb is widely identified for his imaginative and prescient on the intersection of finance and know-how. A finalist of the Econometric Sport — World Championship in Econometrics, he continues to shape the capability forward for digital finance, exploring the programmability of cash and building subsequent-period financial systems which would be like a flash, yield-bearing, and official.
