Why did October 10 become a 'nightmare' for the crypto market?
On October 10, 2022, the cryptocurrency market experienced a massive wave of liquidations that affected almost all trading platforms. Richard Teng, the head of Binance in Singapore, spoke about this event, dubbed '10/10', at the Consensus conference in Hong Kong.
What happened on October 10? According to Teng, on that day there was a massive withdrawal of funds from crypto exchanges, caused by a sharp drop in the prices of major cryptocurrencies. Large investors and traders were forced to close their positions, which led to a cascading effect of liquidations across the entire market. As a result, tens of thousands of accounts around the world were forcibly closed.
How did crypto exchanges react? Teng noted that Binance, like other leading platforms, faced unprecedented load that day. The exchange's systems were operating at the limit of their capabilities to cope with the flood of orders and liquidations. According to the top manager, Binance was able to process the surge in trading activity without serious disruptions.
Could massive liquidations have been avoided? Teng believes that the crypto market is still not mature enough to avoid such 'black swans'. High volatility, leverage, and low liquidity make the industry vulnerable to sharp price movements. In the expert's opinion, more sophisticated risk management mechanisms are needed to smooth the impact of such events.