Crypto's Black Friday Was Its Largest Liquidation Ever. What the Hell Happened? - Ep. 922
Episode publishedPodcast: UnchainedUnchained
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I think it's something like 10 times worse than the FTX collapse, which is pretty astounding if you think about it. I haven't seen anything this aggressive since then. But the amount of money that all of these traders, in theory, were kind of not cheated out of, but were unable to realize is kind of mind boggling. The infrastructure in crypto just failed.
Hi, everyone. Welcome to Unchained, your now hype resource for all things crypto. I'm your host, Laura Jin. Aptos is the no compromise infrastructure for global financial markets. Fast, reliable, and 100 times more cost efficient than other blockchains. See for yourself why Aptos is the chain of choice for institutions, users, and developers alike at The Aptos Experience, October in Brooklyn. I'm here with Dio Casares, founder of Clearer Protocol and advisor at Patagon Management. Welcome, Dio.
Thanks, Laura. Good to be on.
So obviously, we're about twenty four hours after a crazy set of events in the crypto market that all kind of happened in the span of, I don't know, twenty minutes. You wrote a great timeline of the events before and after this Black Friday crash in which we saw $19,000,000,000 in liquidation occur. So tell us the story of what led up to that moment and then what happened during the crash.
Yeah. I mean, at the start, there was already kind of rumblings that something could happen. On Thursday, China had announced any products being exported from China with a certain amount. It was literally like point 1% containing like Chinese rare earth materials, would need government, like direct government approval to be exported, which basically meant they were banning all exports of rare earths outside of China. That kind of was under the radar for a little bit, but it's largely seen as a response to The US banning China from buying a lot of chips. And so this is kind of a very three year
Yeah. I saw a little kind of chart on Twitter that showed that. But let's talk about that in a moment. I do want to hone in on the accounts on Hyperliquid that opened those huge shorts right before the announcement. So first of all, those were new accounts. And when you say that you felt like similar activity might have been seen on centralized exchanges, what clues are you?
I mean, the price in that thirty minute timeframe, it might've just been the fact that these very large players were kind of telegraphing the fact that they wanted to go short. So then people were also going short on other exchanges. But the price dropped about 3% during the course of them going short. And to move the market 3% while at the time, I believe The US market was still open is like is not the size that was exclusively on hyper liquid wasn't enough to move the market that much, if that makes sense.
Oh, okay. Okay. So it would've had to indicate that there were other people that were making similar moves. Okay, got it. Well, what do you make of the fact that we saw at least that on Hyperliquid and it seems reasonable to suppose that there's similar activity on other exchanges? What do you make of that?
It's very likely a case someone knew something. Knowing Hyperliquid and the history of whales putting large positions on crypto, it could be an incredible story of, you know, some crazy whale deciding to go short because the rare earth metals play was kind of telegraphed before. Like, it has been something that if you track Trump, he does care about for a while. And it would make sense for him to drop something like this right before market close because he doesn't want it to nuke the market. He wants, you know, people
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