According to a recent market report from crypto exchange Coinbase, the massive liquidation event on October 10 didn’t break the market — it cleaned it up. Analysts describe it as a necessary “reset” that removed excessive leverage and strengthened the overall structure, setting the stage for a more stable growth cycle.
Instead of a quick rebound, experts expect a slow but sustainable recovery, driven mainly by institutional investors who were largely unaffected by the leveraged sell-off.
Mechanically, the crash was not triggered by liquidity issues but by structural imbalances: altcoins fell harder as market makers withdrew liquidity and DeFi protocols automatically liquidated positions.
On October 10, 2025, the crypto market faced the sharpest flash crash in its history. Within 24 hours, roughly $19 billion in leveraged positions were wiped out. Bitcoin briefly fell by double digits, and thousands of accounts were forcibly closed.
On-chain data now shows a rotation of institutional capital: so-called “smart money” is flowing into the Ethereum Virtual Machine ecosystem (Ethereum, Arbitrum) and projects with real-world utility, while “hype networks” like Solana and Binance Smart Chain are losing momentum.
At the same time, stablecoin inflows have stagnated, suggesting capital rotation rather than new inflows. Institutional demand is increasingly focused on tokenized real-world assets (RWA): in October alone, about $1.5 billion was allocated through funds like BlackRock’s BUIDL into projects on Polygon, Avalanche, and Aptos.
The macroeconomic backdrop remains uncertain — from geopolitical risks to soaring public debt. However, Coinbase analysts believe that productivity gains and AI-driven efficiency could offset the pressure on risk assets.
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