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Analysis of the Epic Big Dump of Crypto Assets "1011": The Truth of the Market Collapse and Future Insights from Wintermute's Perspective
On October 11, 2025, the cryptocurrency market experienced an epic big dump, with Bitcoin rapidly falling from a high of $117,000, breaching the critical psychological level of $110,000 within just a few hours. Ethereum saw a daily drop of up to 16%, while more alts experienced declines of 80% to 90% during extreme periods. This big dump resulted in $19 billion of Crypto Assets being liquidated, with actual Get Liquidated figures potentially reaching $30-40 billion, far exceeding public statistics. As a central figure in this storm, Wintermute's founder and CEO Evgeny Gaevoy revealed in a post-event interview the deeper mechanisms behind the big dump and the true situation of market makers during extreme market conditions.
01 Triple Impact: Structural Reasons for the Epic Big Dump
Black Swan Attack of Macroeconomic Policy
The direct trigger for this big dump was Trump's announcement on social media regarding tariff policy—imposing a 100% tariff on all imports from China starting November 1, along with stricter export controls and financial sanctions. This policy announcement immediately sparked a risk-averse sentiment in global financial markets, with crypto assets, as representatives of high-risk assets, becoming the first to be sold off. What is even more concerning is that the WLFI token, supported by the Trump family, had already mysteriously fallen by 30% before the tariff news was announced, raising suspicions of insider trading.
Vulnerability of High-Leverage Systems
According to Evgeny Gaevoy's analysis, the scale of this liquidation is 5 to 10 times larger than previous events, primarily due to the significant increase in leverage within the system, as well as the emergence of more types of tokens, perpetual contract products, and trading platforms. Unlike traditional markets, the cryptocurrency market lacks a circuit breaker mechanism, which leads to a chain reaction of “Get Liquidated” once support levels are breached. Notably, the USDE stablecoin experienced severe decoupling during the big dump, briefly falling below $0.66 and becoming a symbolic event of this crash.
Market Maker Liquidity Suddenly Dries Up
On the day of the big dump, several major market makers, including Wintermute, were forced to suspend trading. Wintermute strategist Jasper De Maere explained: “Our rules were broken, and we were unable to provide liquidity in a safe, delta-neutral manner.” This delta-neutral strategy is a risk management approach that hedges a portfolio to have no directional exposure to price fluctuations. When the market experiences extreme volatility, the integrity of the market makers' hedging positions is compromised, making it impossible to continue providing liquidity, resulting in a sharp decline in liquidity on the order book and exacerbating price fluctuations.
02 Mechanism Failure: ADL System and Market Infrastructure Defects
Chaotic ADL Execution
The ADL (Automatic Deleveraging) is the “last line of defense” for exchanges, forcing the offset of some short positions and liquidated long positions in extreme cases to prevent a complete price collapse. However, this time the execution of the ADL was unusually chaotic. Gaevoy revealed: “Some ADL prices are completely illogical, with the market price at $1 while our short positions were forcibly closed by the system at a price of $5. This simply cannot hedge, and we can only suffer a quick loss.” This lack of transparency in the ADL mechanism has raised widespread doubts in the market.
Cross-platform asset transfer paralysis
For market makers, the most tricky issue is that various trading paths get stuck during extreme falls. Gaevoy explained: “When you buy on Binance and sell on Coinbase, you find that your stablecoins on the leading CEX in the U.S. are increasing, but on Binance, you have received a hand of tokens—yet at this point, both sides' withdrawals are blocked, making it impossible to transfer assets.” This situation occurs not only on centralized exchanges; DeFi has not been spared either, as market makers are not only “unwilling” to provide liquidity but also “simply unable to do so.”
The Paradox of Transparency and Sniping
Regarding the discussions in the market about how the transparent data of Hyperliquid has fostered targeted attacks, Gaevoy believes the possibility is low because a large amount of open interest still exists on exchanges where liquidation points are not visible. However, he suggested that the “all liquidation points are publicly visible” mechanism represented by Hyperliquid should find a balance between transparency and privacy in the future—current information disclosure is indeed a bit “excessive.”
03 Market Maker Perspective: Wintermute's Crisis Response and Business Reality
Wintermute's Emergency Response Mechanism
As a top global crypto assets market maker and quantitative trading company, Wintermute relied on its global team to respond during the big dump. Gaevoy shared, “The London office and the Singapore office took turns. Around 10 to 11 PM London time, the Singapore team would take over trading.” This global layout ensures that even during extreme market conditions in the middle of the night in London, the company can still maintain operations. Notably, Gaevoy himself slept quite well that night; he admitted, “I only get woken up when things are really bad and we've lost a lot of money. So actually, I slept pretty well that night.”
Business Truth and Market Misinterpretation
In response to accusations that the market views Wintermute as a “scapegoat,” Gaevoy stated that he has completely come to terms with it. He emphasized that there is a widespread misconception that market makers are shorting every day, but in reality, Wintermute has almost always been net long, starting to adopt an overall bullish stance since 2022 or even earlier. The company's risk management approach strictly limits long positions to no more than 25% of net assets, and it does not allocate more than 35% of net assets on a single platform. This risk control has allowed them to withstand the FTX collapse and hacker attacks.
Diverse Business Layout
In addition to its core market-making business, Wintermute also invests in Web3 and Crypto Assets projects with growth potential through its venture capital arm, Wintermute Ventures. Its portfolio is diverse, covering multiple segments such as infrastructure, DeFi, and wallets, including investments in projects like Chaos Labs, bloXroute Labs, and Euler Finance. At the same time, the company is actively expanding its OTC product line in the United States to serve institutions and high-net-worth clients that require large transactions.
04 Future of the Market: Structural Changes and Investment Insights
Liquidity Concentrates on Mainstream Assets
Gaevoy predicts that this round of liquidations will set a historical record, with the main impact being felt in sectors outside of mainstream coins, as liquidations are primarily concentrated in alts. In contrast, Bitcoin, Ethereum, and even Solana have shown relatively stable performance this time—Cosmos (ATOM) once fell by 99.9%, while BTC and ETH's maximum drop was only 15%. He believes that as more ETFs are approved and access channels widen, the volatility of mainstream assets will be increasingly limited, and we will see more and more leverage and liquidity concentrated in these assets in the future.
The Absence and Possibility of Circuit Breaker Mechanisms
Gaevoy strongly questioned why the crypto market has not introduced a circuit breaker mechanism: “In traditional financial markets, almost every exchange is equipped with a circuit breaker mechanism. It prevents the underlying asset from experiencing a big dump in a short period, and the system will automatically pause trading or enter a bidding mode.” He suggested that a circuit breaker mechanism should at least be introduced for specific trading pairs or asset types, such as when Bitcoin falls by 20% on a certain exchange, the exchange can fully determine that this is an abnormal fluctuation rather than a fundamental collapse.
Performance and Limitations of DeFi Systems
Despite the relative stability of decentralized finance during this big dump, such as the limited liquidations of Aave and the system being quite robust, Gaevoy pointed out that DeFi also faces inventory shortage issues similar to those in CeFi. In extreme cases, most competitors simply halted DeFi trading during this event, likely due to their risk control circuit breakers being triggered. Such extreme events happen only once a year, making it difficult to build an optimized system specifically for them.
05 Investor Strategies: Survival Guide in Extreme Market Conditions
Core Principles of Risk Management
The key lesson investors should learn from this big dump is to set reasonable leverage multiples to avoid excessive leverage; diversify asset allocation and not concentrate all funds on a single platform; use limit orders instead of market orders to control slippage risk. Especially in altcoin investments, it is even more important to be wary of the liquidity traps of tokens with high open interest.
Liquidity Monitoring Indicators
Investors should track large on-chain transfer warning signals, especially the significant transfers from market makers to the exchange's hot wallets. At the same time, pay attention to changes in the liquidity of mainstream assets and significant policy changes, such as tariff policies from Trump that could trigger market panic.
Long-term perspective and psychological preparation
As market analysts pointed out after the big dump: “The crypto market has never been a smooth highway; it’s more like a sea full of hidden reefs. The prosperity of a bull market is often accompanied by the illusion of leverage, while black swans are always lurking around the corner.” For retail investors, the most important thing is not to constantly chase after huge profits, but to survive, ensuring they are not Get Liquidated in extreme market conditions, thus having the opportunity to stand on a new starting point in the next cycle.
Conclusion
The big dump of crypto assets on October 11 was not just a simple market correction, but a stress test on the entire crypto market structure. It exposed deep-seated issues such as high leverage, the fragility of liquidity supply from market makers, and insufficient exchange infrastructure, while also demonstrating a certain improvement in market maturity — mainstream assets showed stronger resistance to falls, and the DeFi system performed relatively robustly. As liquidity continues to concentrate on mainstream assets like Bitcoin and Ethereum, and the industry re-evaluates risk mechanism management, the crypto market may move towards a healthier stage of development after experiencing this baptism.