October Market Flash Crash Review: Institutional Withdrawals After $1.3 Trillion Market Capitalization Evaporation

On October 10, the crypto market experienced a significant shock. The market capitalization evaporated by approximately 1.3 trillion dollars in one go. How large is this scale? The insurance fund of a leading exchange directly lost 184 million dollars.

The liquidation in this area is the most exaggerated. The liquidation orders on the Hyperliquid platform accounted for 53% of the total liquidation volume across the entire network, indicating that the risks of leveraged trading completely erupted at that moment. At the same time, Ethena's USDe stablecoin experienced a net outflow of $8.3 billion, with users withdrawing stablecoin assets on a large scale.

The subsequent impact can better illustrate the issue. The overall market trading volume has declined by nearly 50%, and investors are on the sidelines. The performance of the Bitcoin spot ETF is particularly evident—net outflows have reached $5 billion, which means institutional investors are systematically reducing their risk exposure. From the signals of insurance fund losses, concentrated liquidations, and capital outflows, the process of risk release in the market is still ongoing.