BitMEX Reports $20 Billion Liquidation from October Crypto Crash Impacting BTC and ETH Derivatives
Written by Ohris M. Greyoon, Blockchain & Crypto Expert
Source: Coinmarketcap
Updated: Jan 08 2026- Market Crash Impact: The October cryptocurrency crash resulted in approximately $20 billion in liquidations, dropping market liquidity to its lowest level since 2022, which severely damaged market makers' neutral strategies.
- Liquidity Crisis: According to BitMEX's internal report, the liquidity drop forced market makers to hold substantial unhedged spot positions, negatively impacting their profitability and trading strategies.
- Need for Strategy Adjustment: This incident prompted market participants to reconsider strategies reliant on delta-neutral funding rate arbitrage, with annualized returns declining below 4%, highlighting systemic risks posed by high leverage and crowded trades.
- Importance of Risk Management: BitMEX emphasized the challenges faced by market makers in managing involuntary inventory during rapid market declines, underscoring the necessity for robust risk management amid unpredictable market conditions.
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.
