One year after the "10.11 crash": What changes have occurred in the crypto market?

Author: Zhou, ChainCatcher

On October 6th last year, BTC reached an all-time high of $126,080. Four days later, US President Trump announced a 100% tariff on Chinese goods, triggering the largest liquidation in the history of the crypto market. According to CoinGlass, approximately $19.16 billion in leveraged positions were liquidated within 24 hours, affecting more than 1.6 million traders.

Looking back, 1011 became the watershed moment in this bull-bear market transition. In the year that followed, BTC never returned to its previous high. The market experienced capital outflows, leverage contraction, and industry consolidation, and also saw the introduction of some new products and regulations.

On the first anniversary of 1011, this article takes this day as a starting point to review the changes that have taken place in the crypto market over the past year.

BTC dropped by a third, but the tariff trigger never took effect.

On the night of October 11th, BTC plummeted from approximately $121,000, with intraday lows across various exchanges ranging from $102,000 to $110,000. Hyperliquid, an on-chain derivatives exchange, cleared approximately $10.3 billion that night, making it the platform with the largest liquidation volume.

Although the price rebounded afterward, it continued to fluctuate and decline over the next few months. By the end of 2025, BTC had fallen below $90,000. In February of this year, BTC fell from $97,000 to $62,900 in less than three weeks, and on June 30, it hit a new low for the year at $58,500, representing a maximum pullback of approximately 54% from its all-time high.

Compared to previous bear markets, this pullback has been relatively mild. In past cycles, BTC's decline from its peak to its trough has generally exceeded 75%.

Entering the second half of the year, BTC gradually recovered, regaining the $75,000 mark in September. As of October 10, it was trading at approximately $82,700, still down about 34% from its peak.

Opinions are divided on whether the bottom has been reached. BIT Research believes that, based on technical signals, market positioning, and macroeconomic factors, the cyclical low may have occurred in June; however, analyst Benjamin Cowen believes that the market may retest the lows in October.

Looking at the overall market, according to CoinGecko data, the total market capitalization of crypto has decreased from $4.29 trillion a year ago to $2.88 trillion.

Altcoins suffered even steeper losses, with their total market capitalization falling from $1.86 trillion a year ago to $1.23 trillion, a decrease of about 40% after excluding stablecoins.

The 100% tariff that triggered this crackdown ultimately did not materialize, as a consensus was reached between the Chinese and US leaders after their meeting in Busan on October 30th last year. In February of this year, the US Supreme Court ruled that IEEPA did not authorize the president to impose tariffs.

Institutional buying cooled, and the premium for treasury companies disappeared.

Behind the price decline is the contraction of institutional buying. According to SoSoValue data, the historical cumulative net inflow of US spot BTC ETFs was $62.77 billion as of October 10, 2025, but has now dropped to $57.08 billion, representing a net outflow of approximately $5.7 billion over the past year. Asset size has shrunk from $158.97 billion to $105.22 billion, a reduction of about one-third.

The outflows were most concentrated at the end of 2025, with a combined net outflow of $4.57 billion in November and December, marking the largest two-month outflow since the BTC ETF was listed. Funds continued to flow out in 2026, with a net outflow of $5.4 billion in the first half of the year, also the first time the BTC ETF had experienced a half-year net outflow since its listing.

Funds didn't begin flowing back in until August of this year. In the week ending September 25, the BTC ETF recorded a net inflow of $2.4 billion, a record for a single week. However, this inflow has not yet made up for the previous outflows.

The situation is even worse for ETH ETFs. According to SoSoValue data, the assets under management of ETH spot ETFs have shrunk by nearly half, from about $32 billion a year ago to about $15.7 billion.

Meanwhile, some funds flowed into newly listed altcoin ETFs, with net inflows into SOL and XRP spot ETFs reaching approximately $1.58 billion and $1.81 billion, respectively.

Along with ETFs, digital asset treasury companies are also cooling down. Strategy's holdings increased from about 640,000 BTC to 848,000 BTC in a year, but its mNAV once fell to 0.63 in June this year, meaning that the market value of its stock holdings was only about 60% of the value of its cryptocurrency holdings.

In late May of this year, Strategy sold 32 BTC to pay dividends, marking the company's first BTC sale since 2022. With BTC rebounding in the second half of the year, Strategy's average holding price of approximately $75,440 has fallen below market value again.

Leverage is being slowly rebuilt; the battleground and the target have both changed.

The high leverage accumulated during the peak of the bull market has fallen sharply this year. According to CoinGecko statistics, the total open interest of perpetual contracts in the market reached a peak of $210 billion on October 7, 2025, and then dropped to about $99.1 billion in April of this year, nearly halved.

The situation is similar for BTC. In early October 2025, BTC futures open interest was approximately $94 billion, and currently it is around $52 billion. Roughly estimated, even excluding the impact of price declines, the open interest in BTC is still about 20% less than a year ago.

The trend in funding rates reflects this. From February to April this year, BTC funding rates turned negative multiple times, with short-selling demand exceeding long-selling demand at one point. Rates returned to positive territory after August, but remained below levels seen a year ago for most of the time.

During the reconstruction process, a significant portion of the leverage flowed onto the blockchain. According to CoinGecko statistics, the open interest ratio of perpetual contract DEXs rose from less than 4% at the beginning of 2025 to 13.5% in April of this year.

According to statistics from Castle Labs, as of September, the total open interest on perpetual DEX contracts was approximately $14.6 billion, with Hyperliquid accounting for 56.8% of that.

The range of trading instruments has also expanded beyond crypto assets. Perpetual contracts for traditional assets such as gold and semiconductor ETFs have entered the top ten in terms of trading volume among crypto derivatives. On-chain RWA perpetual contracts are growing even faster, with a monthly trading volume of approximately $147.5 billion in July this year, accounting for nearly 20% of the total on-chain perpetual contract trading volume that month.

These new assets have also brought new sources of volatility. In April of this year, international oil prices surged due to the situation in Iran, resulting in approximately $400 million in liquidations in the cryptocurrency market in a single day. The largest single liquidation was an oil position on Hyperliquid, worth approximately $17.17 million.

The yield-generating dollar trend is receding, and USDe has shrunk by two-thirds.

As leverage contracts, the yield-generating synthetic dollar that expanded rapidly during the bull market is also receding. Ethena's USDe earned funding rates by holding spot assets while shorting perpetual contracts, resulting in high yields and rapid expansion during the bull market.

On the evening of October 11th, USDe briefly fell to $0.65 on Binance, and its size has continued to shrink since then. According to official Ethena data, the USDe supply peaked at $14.82 billion on October 5, 2025, and is currently around $4.79 billion, a reduction of about two-thirds.

In November 2025, Balancer suffered an attack that resulted in a loss of approximately $128 million, triggering a liquidity crunch in DeFi. Stream Finance subsequently disclosed a loss of $93 million, its synthetic USD xUSD became unpegged, and its liabilities to various DeFi lenders amounted to approximately $285 million. Elixir also announced the closure of its synthetic USD deUSD.

In April of this year, USDe suffered another significant loss due to a theft. On April 18, approximately $292 million was stolen from Kelp DAO. The attackers deposited the stolen funds into the lending protocol Aave, triggering a run on Aave. Aave's total locked value dropped from approximately $26 billion to $14.2 billion within five days, with multiple liquidity pools reaching 100% utilization.

Users on Aave who used USDe for revolving lending were forced to liquidate their positions, reducing USDe's circulating supply by approximately $2 billion over the following ten days. Ethena itself had no exposure to rsETH, and minting and redemption were not interrupted. Shane Molidor, founder of Web3 investment bank Forgd, believes that this event disrupted the arbitrage trading that supported demand for sUSDe, and that the yield on unleveraged sUSDe was already comparable to that of US Treasury bonds.

As its size has shrunk, USDe's underlying assets have also been adjusted. A year ago, USDe's collateral consisted mainly of cash and hedged BTC and ETH. According to Ethena, DeFi lending and institutional lending currently account for more than half of its collateral assets, while crypto basis trading accounts for approximately 18%.

During the same period, the total supply of stablecoins also stopped expanding. According to Artemis data, from August 2024 to October 2025, the total supply of stablecoins increased from approximately $150 billion to approximately $305 billion, and then hovered around $300 billion for the following year.

In terms of market share, USDT and USDC still account for over 80%. According to CoinMarketCap data, the current circulating supply of USDT is approximately $183.3 billion, and USDC is approximately $73.7 billion, with USDC's size remaining roughly the same as a year ago.

With frequent thefts and bankruptcies, cold wallets are no longer a safe haven.

The aforementioned Kelp DAO hack is just one of many security incidents this year. According to TRM Labs, a record 207 hacking incidents occurred in the first half of this year, with approximately $972 million stolen, less than half of the amount in the same period last year.

However, the situation deteriorated significantly in the second half of the year. According to CertiK, September saw thefts exceeding $766 million, making it the worst-performing month this year. Bitget suffered approximately $352 million in losses, while Liquid Network lost approximately $319 million. To date, security agencies have estimated total thefts this year to be between $1.7 billion and $2.7 billion.

The attacks have also extended to hardware wallets held by individual users. In late July, the hardware wallet Coldcard was found to have a firmware vulnerability. Some devices used weak random numbers when generating mnemonic phrases, allowing attackers to deduce users' mnemonic phrases in bulk without physical contact with the devices. According to TRM Labs, approximately 1,800 BTC were transferred, involving more than 5,200 addresses.

Some users reported that their assets were stolen even though their devices were never connected to the internet and their mnemonic phrases were never leaked. Coinkite, the parent company of Coldcard, is demanding that all mnemonic phrases generated on its devices since March 2021 be considered potentially leaked, and users need to transfer their assets as soon as possible.

On October 9th, Ledger users experienced another large-scale theft. According to on-chain analyst Specter, the losses exceeded $86 million, affecting hundreds of wallets across multiple chains including Ethereum, TRON, and Bitcoin. Many victims purchased devices through the Southeast Asian distributor CryptoBilis.

Ledger has asked the reseller to suspend sales and advised users who recently purchased devices through that channel to change their mnemonic phrases. Former Mt. Gox CEO Mark Karpelès revealed that a Ledger he purchased in Malaysia contained a suspicious module with a SIM card chip, but the specific cause of the incident is still under investigation.

The combination of theft and a bear market meant that a number of companies couldn't survive the year. According to incomplete statistics, more than 60 crypto companies and projects closed or went bankrupt in the first seven months of this year. As for exchanges, AscendEX ceased operations in early July, BitMart announced its closure in July, and CoinEx will completely shut down on December 22nd.

The most attention-grabbing case is BitMEX. One of the first exchanges to launch 100x leveraged perpetual contracts, it permanently shut down on September 23, ending 11 years of operation. BitMEX stated that its assets exceeded its liabilities and that it had never lost customer funds due to a hacking incident in its history.

In addition, Movement Labs and the mining pool Poolin filed for bankruptcy protection, while Step Finance, part of the Solana ecosystem, ceased operations after being robbed of approximately $40 million.

On-chain US stocks and prediction markets are rapidly emerging.

While established players were leaving the market, some new products also experienced rapid growth this year, with on-chain stocks launched by exchanges being one of them.

Binance launched its tokenized stock product, bStocks, on June 11th of this year. According to official data, bStocks' assets under management exceeded $500 million within seven weeks of its launch, with Generation Z contributing 44% of the trading volume and 41.5% of users experiencing traditional financial investment for the first time through bStocks. Platforms such as Kraken and Bybit have also launched tokenized stocks, allowing users to use them as margin.

Unlike traditional US stocks, these tokens can be traded 24/7. According to Binance, bStocks account for 58% of its stock-related trading volume after the US stock market closes, and its price during market closure is mainly determined by internal buying and selling within the exchange.

Beyond on-chain US stocks, a wider range of tokenized assets are also growing. According to data from rwa.xyz, as of October 9, the value of RWA distributed on-chain was approximately $39.1 billion, with tokenized US Treasury bonds remaining the largest category.

The prediction market also exploded in that year. According to data from The Block, the combined monthly trading volume of Kalshi and Polymarket increased from approximately $8.5 billion in October 2025 to approximately $72.3 billion in September 2026, a nearly tenfold increase in one year.

The valuations of the two leading platforms have also soared. However, rapid expansion has embroiled the prediction market in a regulatory battle, with the focus on whether sports contracts should be regulated federally or by the state. In April of this year, the Third Circuit Court of Appeals ruled that New Jersey had no jurisdiction to regulate Kalshi's sports contracts, but the Ninth and Sixth Circuit Courts of Appeals issued contradictory rulings in August and September, respectively.

The CFTC has filed lawsuits against several states, asserting its exclusive regulatory authority over event contracts. Meanwhile, 44 states have jointly written to the CFTC expressing their opposition, and New York State also sued Polymarket in September for operating an unlicensed gambling operation. It is widely expected that this issue will ultimately be decided by the Supreme Court.

Interest rate cut turns into interest rate hike; legislation stalled in Congress.

At the beginning of the year, the market generally bet on the Federal Reserve to cut interest rates, but due to the Middle East situation pushing up oil prices and persistently high inflation, the Federal Reserve raised interest rates to 3.75% to 4% in September. This was the first rate hike since 2023 and Warsh's first major decision after taking over as chairman.

The Federal Reserve projects that inflation will not return to its 2% target until 2029. The next policy meeting will be held on October 27-28.

Tariffs also remain an uncertain factor. In February of this year, the U.S. Supreme Court ruled that IEEPA did not authorize the president to impose tariffs, rendering tariffs previously imposed under that law invalid. Since then, the U.S. government has used other laws to authorize tariffs, and related litigation is still ongoing.

Beyond interest rate hikes, the legislation the crypto industry has been hoping for has failed to make a breakthrough. The Market Structure Act Clarity failed to advance in a procedural vote in the Senate on September 15th by a vote of 49 to 50, and Senate Majority Leader Cynthia Lummis subsequently stated that the bill was unlikely to pass. With the midterm elections approaching in November, the likelihood of the current Congress passing it is very low.

Although the GENIUS Stablecoin Act was signed in July 2025, the supporting rules have lagged behind. All federal agencies missed the rule-making deadline of July 18 this year, and the Treasury Department did not release the first binding rule until September 30. The Act is expected to officially take effect in January 2027.

With Congress stalled, the regulatory framework has been primarily driven by the executive branch. In March, the SEC and CFTC jointly released a token classification framework, categorizing digital assets into five classes. In August, the SEC proposed an exemption for the issuance of crypto assets, and on September 17, it introduced an innovation exemption allowing tokenized US stocks to be traded on-chain. In October, it proposed rules for the custody of crypto assets. The CFTC also submitted its crypto market rules to the White House for review in September.

at last

Looking back on the past year, from the liquidation of 1011 to the closure of BitMEX, a number of veteran players have gradually left the market. Leverage has shifted from centralized exchanges to on-chain trading, and trading instruments have expanded from crypto assets to US stocks and oil. ETFs, tokenization, and prediction markets have also brought the crypto market and traditional finance closer together. In what form will the new cycle begin?

Source:Global Cybersecurity Alliance (GCSA)
Website:www.gcsa.org