A massive wave of forced liquidations has shaken the cryptocurrency landscape, underscoring the risks of excessive leverage in digital asset markets. Galaxy, a global leader in digital assets and AI infrastructure, shared an analysis on social media platform X on Oct. 13, highlighting that the recent selloff marked one of the largest liquidation events in crypto history.

The firm explained that renewed tariff threats triggered a global macro shock, sparking a rapid downturn across major cryptocurrencies. Forced liquidations exceeded $19 billion as leverage unwound and exchange-driven auto-deleveraging drained liquidity across trading platforms.

“Friday’s sharp crypto market downturn — one of the largest liquidation events in digital asset history — was driven by a sudden global macro shock that set off a chain reaction of liquidations,” Galaxy stated, adding:

Importantly, this was not a failure of underlying stablecoin systems or DeFi protocols, but rather a market-wide deleveraging event amplified by exchange-side pricing risk and auto-liquidations.

Galaxy clarified that while a technical issue on one platform compounded the stress, the episode reflected broader market conditions rather than structural weaknesses in decentralized finance.

The firm highlighted its risk management discipline and diversified trading infrastructure designed to prevent unwarranted liquidations and maintain stability in volatile markets. Galaxy confirmed that its institutional platform continues to offer over-the-counter and electronic trading, derivatives, and structured solutions, while individual users can access yield and trading services through its Galaxyone app. The company reaffirmed that its systems remain fully operational and liquid, emphasizing readiness to support clients during market turbulence and reiterating that the downturn was part of a broader deleveraging cycle, not the result of any single asset.

• What caused the massive wave of crypto liquidations?
  A sudden global macro shock, fueled by renewed tariff threats, triggered a rapid market downturn that led to over $19 billion in forced liquidations.
• Was this a failure of stablecoins or DeFi systems?
  No, Galaxy explained that the event was a market-wide deleveraging issue, not a structural failure of stablecoins or decentralized finance protocols.
• Did Galaxy’s systems suffer any operational impact?
  Galaxy stated its systems remained fully operational and liquid throughout the downturn, continuing to support both institutional and individual clients.
• What trading services does Galaxy offer during volatile markets?
  Galaxy provides over-the-counter and electronic trading, derivatives, and yield solutions through its institutional platform and Galaxyone app.

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