2025 Exposes Hidden Risks in Crypto Perpetuals, $20 Billion Liquidation Cascade Triggers Trust Crisis
Written by Ohris M. Greyoon, Blockchain & Crypto Expert
Source: Coinmarketcap
Updated: Jan 09 2026- Structural Fragility: The October 2025 liquidation cascade, estimated at nearly $20 billion, exposed the structural fragility of exchange risk engines, fundamentally altering market maker behavior and indicating that future liquidity will be more selective rather than abundant.
- Yield Compression: Funding rate arbitrage strategies became overcrowded in 2025, with yields dropping to low single digits, reflecting market maturity and efficiency, leading traders to reassess risk-reward ratios against traditional fixed-income alternatives.
- Trust Rebuilding: As the transparency and fairness of exchange behavior came into question, fair matching engines gained traction while predatory models lost credibility, suggesting that future exchange competition will increasingly rely on trust and execution integrity.
- Rise of Decentralized Exchanges: Decentralized perpetual exchanges like Hyperliquid gained significant volume in 2025, providing traders with alternatives during centralized exchange stress, although decentralization introduced new risks, emphasizing the need for quality infrastructure and transparency in future markets.
About the author
Ohris M. Greyoon
Ohris M. Greyoon holds a Master’s in Computer Science from MIT and has 10 years of experience in blockchain technology and cryptocurrency markets. A pioneer in decentralized finance (DeFi) analysis, he leads Intellectia’s Crypto News, offering cutting-edge insights into digital assets.
