BlockBeats News, October 20th. Evgeny Gaevoy, founder of the crypto market maker Wintermute, stated in The Block’s podcast that he believes the “10.11” crash event was the result of multiple factors overlapping. On the one hand, there was indeed more leverage in the system; on the other hand, the market also saw more token categories, more perpetual contract products, and larger platforms trading these perpetual contracts.
Looking back three to four years ago, we simply did not have this many perpetual contract products with huge open interest, posing a significant risk of a crash. In terms of market maturity, although the overall market is indeed more sophisticated and advanced than in the past, this development has also given rise to many issues.
It is still unclear who exactly was “liquidated” and who suffered the most significant losses, but I suspect that many heavily affected institutions were actually running a long-short strategy. For example, they may have been shorting Bitcoin while longing certain altcoins, thinking that this would hedge their risks, only to be “liquidated” by the ADL mechanism.”
