A Summary of Eight Major Futures Liquidation Events in the Cryptocurrency Market and Their Causes

Here are the top eight historical events in the derivatives market of cryptocurrencies with the highest liquidation amounts since the inception of cryptocurrency trading.

1. October 11, 2025: Tariffs + High Leverage + USDe Depegging

• Liquidation Amount: $19.1 billion, over 1.62 million people liquidated
• Core Event: President Trump suddenly announced that the United States would impose 100% tariffs on China starting November 1. Due to the 12% subsidy of USDe, many market users engaged in USDe circular loans, leading to USDe being attacked at a premium, resulting in the liquidation of USDe circular loans and further depreciation of USDe, causing USDE stablecoin to depeg below $0.66. Market makers lacked liquidity support, and many altcoins had no buyers, leading to short-term price collapse;
• Market Impact: Many altcoins dropped 60%-90% overnight, some even fell over 99%; exchanges crashed, and some tokens showed prices as zero. The 24-hour liquidation amount set a record for crypto futures liquidations, far exceeding the total liquidation amounts of events such as "312" and "519".

2. May 19, 2021: Regulatory Storm Causing Epic Liquidation

• Liquidation Amount: $6.9 billion, over 580,000 people liquidated
• Core Event: The Chinese State Council Financial Stability and Development Committee explicitly "cracked down on Bitcoin mining and trading activities", and major power provinces such as Inner Mongolia and Sichuan completely shut down mining farms, causing Bitcoin's network hash rate to drop nearly 50%. At the same time, the U.S. SEC launched investigations into cryptocurrency exchanges, triggering panic in the market. Bitcoin's price plummeted from $45,000 to below $30,000, with a drop of over 33% within 24 hours, and Ethereum fell by more than 45%.
• Market Impact: This crash was called the "519 Tragedy". Top exchanges like OKEx and Binance experienced system congestion, preventing users from closing positions, exacerbating losses.

3. February 23, 2021: Institutional Fund Withdrawal and Leverage Crash

• Liquidation Amount: $3.7 billion, over 370,000 people liquidated
• Core Event: From late 2020 to early 2021, Bitcoin and altcoins rose for months, accumulating significant profits. Subsequently, Bitcoin's price fell from $58,000 to $45,000, a daily drop of over 20%. Institutional investors (such as Tesla) were reported to have reduced their Bitcoin holdings, and concentrated liquidation of high-leverage long positions occurred. Huobi and OKEx accounted for over 70% of the liquidation amounts on the entire network.
• Market Impact: 486,700 people liquidated, setting a new record at the time. This crash exposed the excessive dependence of the market on institutional funds and the fragility of high-leverage trading.

4. February 3, 2025: Trump Tariffs

• Liquidation Amount: $2.1 billion, over 700,000 people liquidated
• Core Event: After Bitcoin broke a new all-time high of $124,500, some investors took profits. Ethereum fell from $2,900 to $2,100 in a single day. Trump signed an executive order imposing 25% tariffs on imports from Canada and Mexico and 10% tariffs on imports from China, as a measure to address border immigration issues and trade imbalances, which triggered concerns about global trade wars.
• Market Impact: 160,000 people liquidated, with longs accounting for 76.2%. Bybit and Binance contributed 68.3% of the liquidation amounts, showing a high concentration of risk.

5. March 12, 2020: Pandemic Triggering Global Liquidity Crisis

• Liquidation Amount: $2.93 billion, over 100,000 people liquidated
• Core Event: The pandemic spread in Europe and the United States, causing global stock market crashes, and Bitcoin, as a risk asset, was sold off. The price dropped from $7,672 to $3,800, a drop of over 50% within 24 hours. Exchanges such as BitMEX suspended trading due to system overload, and the price difference between platforms reached up to $1,000.
• Market Impact: This was the first time the cryptocurrency market experienced a global systemic financial shock, with on-chain leveraged liquidations and traditional market selling forming a resonance. Grayscale was reported to have sold 40,000-50,000 Bitcoins, further amplifying the selling pressure.

6. December 10, 2024: Bull Market Adjustment and Liquidity Crisis

• Liquidation Amount: $1.7 billion, over 590,000 people liquidated
• Core Event: After Bitcoin's price briefly fell to $94,355, it quickly rebounded. Ethereum fell 10% to $3,590. Long liquidations exceeded 90%, and a single liquidation on Binance's ETH/USDT contract reached $19.69 million.
• Market Impact: 560,000 people liquidated, setting a two-year high. This event reflected the vulnerability of high-leverage trading in the late stage of a bull market and the extreme volatility of the altcoin market.

7. August 18, 2023: Musk's Remarks Causing Market Tremors

• Liquidation Amount: $1.032 billion, over 175,000 people liquidated
• Core Event: It was revealed that SpaceX, owned by Musk, had written down $373 million in Bitcoin assets and sold part of its holdings. Bitcoin's price fell from $26,000 to $24,000, a drop of nearly 10% within 24 hours. Altcoins such as Solana and XRP fell over 16%.
• Market Impact: This event highlighted the short-term impact of celebrity influence on Bitcoin's price. The premium rate of the Grayscale Bitcoin Trust (GBTC) dropped to historic lows, reflecting a lack of market confidence.

8. November 2022: FTX Bankruptcy Causing Trust Crisis

• Liquidation Amount: $1.6 billion, over 180,000 people liquidated
• Core Event: The cryptocurrency exchange FTX collapsed due to misappropriation of customer assets, causing Bitcoin's price to fall from $21,000 to $16,000, a drop of over 23% within seven days. Investors panicked and withdrew from exchanges, causing a surge in the redemption volume of stablecoins such as USDT and USDC.
• Market Impact: This event was called the "Crypto Lehman Moment," prompting global regulatory authorities to re-examine the industry. Lending platforms such as Genesis and BlockFi subsequently went bankrupt, and market liquidity dried up.

From the above events, it can be seen that crashes often occur alongside high leverage and liquidity crises, with external political events and regulatory policies acting as catalysts. Due to its high volatility, cryptocurrency is often accompanied by sharp rises and falls. To survive in the market, risk control is the first priority, and one must always respect the market.

Author: Aaron, ChainThink