The DeFi Decoded Podcast The Aftermath and Lessons From Crypto's Flash Crash
Oct 31, 2025
Dive into the recent crypto flash crash, where a single tweet sparked a liquidation cascade, revealing vulnerabilities in leverage and liquidity. Discover why Bitcoin and Ethereum are recovering while altcoins struggle due to flawed tokenomics and pressure from exchange listings. Learn about the rise of on-chain trading platforms and how TradFi integration may address liquidity issues. Plus, explore the significance of new ETFs for institutional access and the evolving dynamics of digital-asset-treasuries as they navigate a turbulent market.
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Flash Crash Liquidation Cascade
- Andrew describes a liquidation cascade after a Trump tariff tweet that forced leveraged longs to be sold.
- He reports altcoins plunged, some briefly trading near zero across exchanges during the cascade.
Leverage Cleansed, Alts Remain Fragile
- The crash removed much leverage and left altcoins particularly depleted of speculative capital.
- Bitcoin and Ethereum mostly recovered while many alts remain significantly down.
Why Most Tokens Struggle
- Market microstructure and broken tokenomics explain much of alt underperformance.
- Projects that buy back tokens signal alignment and perform measurably better.