From October 10 to 11, the event known as the “2025 Leverage Reset” caused a big dump, resulting in nearly 450 billion USD in market capitalization evaporating, with USD briefly falling to 0.65.
Historic flash crash: market evaporates 450 billion USD in one day
From October 10 to 11, 2025, the cryptocurrency market experienced an unprecedented “Black Friday” moment. Due to the impact of global macro factors, the daily leverage liquidation scale exceeded 19 billion USD, setting a new record in crypto history, far surpassing the 2022 Terra/Luna collapse and the FTX crisis.
The price of Bitcoin (BTC) once fell below 105,000 USD, while Ethereum (ETH), Solana (SOL), and XRP all plunged 15% to 30%, with over 1.23 million trading positions being liquidated, of which as much as 88% were long positions.
This disaster also caused the synthetic stablecoin USDe issued by Ethena Labs to experience severe decoupling, dropping to 0.65 USD at one point, triggering panic in the market.
Event Comparison: The Birth of the Largest Liquidation Event in History
Event Date 24-Hour Settlement Amount Number of Affected Traders Trigger Source USDe Depeg Event 2025/10/10–11 $19.13B 1.62M Trump Tariffs; BTC falls to $102K CoinGlass / Bloomberg COVID Crash 2020/3/12–13 $1.2B–$1.6B About 200,000 Global Lockdown CoinGlass Terra/LUNA Collapse 2022/5/9–12 (Peak Day) $2.8B About 300,000 UST Depeg CoinGlass / CryptoValleyJournal FTX Bankruptcy 2022/11/8–11 (Peak Day) $4.1B About 500,000 Exchange Insolvency CoinGlass / @finqtcom February 2025 Pullback 2025/2/3 About $10B (Estimated) 730,000 Trade War Expectations Bybit CEO / Cointelegraph September 2025 Technical Correction 2025/9/22 $1.8B 370,000 Technical Factors Cointelegraph August 2023 Volatility 2023/8/18 $1.05B N/A SEC Lawsuit CoinGlass / Binance December 2024 Bull Market Peak 2024/12/6 $1.77B 589,000 BTC Breaking $100K Leads to Over-Optimism Binance Square / Binance
Trigger of the event: Trump's tariff policy ignites market sentiment
The trigger for this crash came from U.S. President Trump announcing on October 10 at 21:00 UTC a 100% tariff on Chinese goods, exacerbating trade tensions between the U.S. and China.
The news triggered a sharp rise in global risk aversion, with the US dollar strengthening. Capital outflow from the US stock market reached 1.6 trillion USD in a single day. Risk assets plummeted across the board, with Bitcoin falling from approximately 121,300 USD to 105,000 USD in less than an hour, triggering a large number of automatic stop-loss orders and leveraged liquidations.
(Trump threatens to increase tariffs on China, resulting in a big dump of billions of dollars in cryptocurrency positions)
Clearing tsunami hits: Record-breaking $19 billion evaporated
According to statistics, as of noon on October 11 (UTC), the total daily liquidation amount reached 1.91 billion USD, the highest ever recorded. The liquidation amounts of major assets are as follows:
Asset liquidation amount (long position) Price drop BTC 2.89 billion USD fell to 105K (-11%) ETH 2.5 billion USD dropped 15-20% SOL 1.17 billion USD plummeted 25-30%
Among them, BTC, ETH, and SOL accounted for more than 88% of the total liquidation amount. The thin liquidity over the weekend further amplified the volatility, with exchanges like Binance even experiencing order book freezing and stop-loss failures.
USD急劇脫鉤：一度跌至 0.65 USD
On the evening of October 10th (22:00-23:00 UTC), USDe experienced a significant decoupling on exchanges such as Binance and Uniswap, with the lowest price dropping to 0.65 USD, and falling to as low as 0.62 USD against USDC, a difference of 35% from its peg to 1 USD.
The main reasons for decoupling include:
Extremely thin liquidity: The USDe spot market only needs 6 million USD to experience a 4% slippage.
Leveraged chain reaction: USDe is widely used as margin, and when its price falls, it triggers a margin call demand, leading to further selling pressure.
Decoupling of related assets: BNSOL (staked SOL) and WBETH (wrapped ETH) also experienced a big dump, falling to $34.90 and $430 respectively, creating a chain reaction.
A big dump lasting just 5 to 10 minutes caused the daily trading volume of USDe to surge to over 360 million USD.
Why has USDe decoupled? The mechanism of synthetic stablecoins is under test.
USDe adopts a delta-neutral strategy, using hedged positions in cryptocurrencies (such as ETH, BTC) as support, combined with perpetual contracts for shorting to maintain stability. However, under extreme market conditions, this mechanism reveals the following structural weaknesses:
Arbitrage Breakdown: Although the minting and redemption functions continue to operate, the derivatives market is disconnected from the spot market, leading to a price decoupling.
Collateral prices big dump: Assets such as ETH used as collateral have fallen, affecting overall stability.
Exchange friction: Especially on Binance, USDe as leveraged collateral has magnified the chain reaction. There are rumors that some large holders concentrated their sell-off of USDe to avoid liquidation, becoming the ignition point.
This is not the first time USDe has encountered issues. It briefly decoupled in April 2024 and August 2025, but this time the problem has been magnified due to the overall surge in leverage.
Ethena responds: Operating well, Binance initiates loss investigation
Ethena Labs issued a statement on October 10 at 22:13 UTC, stating: “Despite the market's volatility, the minting and redemption functions of USDe have not been interrupted, and the system remains over-collateralized.” They pointed out that due to the negative funding rate in perpetual contracts, it has instead led to unrealized profits (uPNL) for USDe positions, increasing the collateralization rate.
Founder Guy Young further responded to rumors in the community, stating that “panic and FUD come from untrustworthy sources,” emphasizing that the agreement mechanism is still functioning well.
Binance issued an announcement at 1:36 AM UTC on October 11, acknowledging the decoupling of USDe, BNSOL, and WBETH, and initiated a loss investigation and subsequent compensation process. Users are advised to adopt “flash redemption” to reduce slippage risk.
USD returned to 0.99 USD, arbitrageurs made a profit of 50%+
As of noon on October 11, the price of USDe has stabilized at around 0.99 to 1.00 USD, with a total supply of approximately 9.3 billion USD. Many quick-witted arbitrageurs bought heavily at 0.65 USD and redeemed, achieving a daily profit of over 50%. Despite this storm sweeping the market, mainstream DeFi protocols like Aave and MakerDAO have not encountered systemic shocks, with only a few traders' accounts completely wiped out.
Future Outlook: Can USDe continue to grow?
This time it is not a failure of the agreement, but an extreme stress test. The mechanism of USDe exposed the risks of non-atomic transactions under a black swan event, but its hedging strategy also demonstrated resilience.
For users, this event serves as a reminder once again:
Cautious leverage operation: especially on synthetic stablecoins.
Pay attention to liquidity and funding rates: especially during weekends or significant policy changes.
In the future, with the integration of BlackRock's BUIDL plan and the positive policies brought by the U.S. GENIUS Act, the market capitalization of USDe may still surpass 2 billion USD before the end of the year. However, the premise is that the market can overcome the shadow of this “leverage earthquake.”
Uptober canceled? But it might be the starting point for a rebound.
The “Uptober” market seems to have come to a halt, but historical experience tells us that after every wave of liquidations, it is often accompanied by market recovery and rebound.
Will this time once again prove that “a fall enough is a buying point”? Be careful with leverage; rational operation is the survival rule in this DeFi wave.
The article USDe flash crash storm: the largest single-day liquidation in history, severely impacting the crypto market, and Binance experiencing order book faults, first appeared in Chain News ABMedia.
