BlockBeats News, January 8th, according to CoinDesk, the cryptocurrency exchange BitMEX pointed out in its latest report that the “1011” flash crash shockwave hit market makers, forcing them to hold a large amount of cryptocurrency. This flash crash resulted in approximately $20 billion in cascade liquidations, devastating market makers’ neutral strategy and causing market liquidity to drop to the lowest level since 2022.
BitMEX stated that “when the ADL (Auto-Deleveraging) mechanism is triggered and market makers’ short positions used for hedging are forcibly liquidated, these institutions are forced to hold unhedged spot positions during a rapid market decline. This situation broke the commitment of perpetual contract ‘neutral strategies,’ causing market makers to withdraw liquidity globally in the fourth quarter of 2025, thereby reducing order book liquidity to the lowest level since 2022.”
With a large influx of imitators, Delta-neutral “easy yield” relying on funding rate arbitrage saw a significant shrinkage, with annualized returns dropping to below 4%. Meanwhile, B-book platform models captured substantial profits, the DeFi perpetual contract market remains susceptible to manipulation, and the traditional finance perpetual contract market has experienced explosive growth.
