$2 billion in positions<\/a> were wiped out in just one day, making it one of the most significant liquidation events in crypto history.<\/p>\nSo yes, the effects are still playing out, but from what we can see, it\u2019s not a systemic collapse. From our vantage point at MEXC, we\u2019re seeing very healthy inflows and outflows from retail users. People are still trading actively.<\/p>\n
However, some institutions are clearly taking a step back. I\u2019d say it\u2019s more of a \u201ccalm down\u201d period. They\u2019re waiting to see what\u2019s going to happen with the broader macroeconomic picture, which remains unclear. So many would rather pull back temporarily and reassess whether it\u2019s time to accumulate more tokens or withdraw altogether.<\/p>\n
CN: You mentioned the October 10th flash crash. At the time, liquidity issues affected major exchanges, such as Binance. Since then, have exchanges made any architectural changes to avoid similar disruptions?<\/strong><\/p>\nHsueh<\/strong>: That crash mainly happened on a single exchange. It wasn\u2019t a cascading event across platforms. I\u2019m not a spokesperson for that exchange, so I can\u2019t say whether they\u2019ve made changes.<\/p>\nWhat I can say is that at MEXC, we didn\u2019t experience any outages or downtime on that day. Our technical infrastructure remained very stable \u2014 our matching engine, security systems, everything functioned normally. We ensured user assets were safe throughout. That was true for the October 10th event and for the more recent crash last week as well.<\/p>\n
CN: You mentioned institutions taking a \u201cwait and see\u201d approach. What\u2019s your read on the broader institutional sentiment? Are some seeing this as a buying opportunity, or are they reevaluating the risks of crypto?<\/strong><\/p>\nHsueh<\/strong>: Institutional behavior is quite diverse right now. Some institutions are still very active. For example, MicroStrategy \u2014 Michael Saylor just posted that they\u2019ve been buying Bitcoin every day this past week. They remain very bullish and see the current prices as a good opportunity to accumulate.<\/p>\nOn the other hand, crypto venture capital firms are pulling back. From the conversations I\u2019ve had, many are pausing investments right now. Many tokens from newly launched projects are down 50% or more, making the environment risky for VCs.<\/p>\n
Unlike other institutions, crypto VCs don\u2019t have the power to influence token prices post-investment. They\u2019re simply allocating funds and hoping for appreciation. Given current market conditions, they\u2019re being more cautious.<\/p>\n
As for TradFi institutions, they\u2019re also mostly waiting. A lot hinges on macroeconomic indicators, and until there\u2019s more clarity, they\u2019re choosing to observe rather than act.<\/p>\n
<\/p>\n
CN: There\u2019s a big difference in how major assets like Bitcoin and Ethereum react compared to smaller altcoins. Even though Bitcoin dropped 20% in a few days, what signs show that this is different from the 2020 crash?<\/strong><\/p>\nHsueh<\/strong>: It\u2019s definitely different. At the end of the last cycle, we saw disasters like Luna\u2019s collapse, stablecoins losing their pegs, and the FTX implosion \u2014 all of which caused massive liquidity crunches.<\/p>\nIn contrast, today\u2019s correction isn\u2019t driven by structural failures. It\u2019s more about uncertainty around macroeconomic conditions. Liquidity remains healthy, and we\u2019re not seeing withdrawal freezes or platform failures like in 2022.<\/p>\n
This is more of a sentiment-driven correction than a fundamental one.<\/p>\n
CN: In the past year, we\u2019ve seen increased institutional interest in Bitcoin and other major crypto assets. Some people argue that this is making Bitcoin more correlated with high-risk equities. What\u2019s your perspective? Is Bitcoin behaving more like equity now or more like gold?<\/strong><\/p>\nHsueh<\/strong>: The trend is becoming clearer. People used to call Bitcoin \u201cdigital gold,\u201d and in earlier years \u2014 during events like COVID or geopolitical turmoil \u2014 Bitcoin often acted as a hedge, even increasing in price when traditional financial systems were under pressure.<\/p>\nBut now, it\u2019s showing much stronger correlations with the stock market. That\u2019s partly because of the Bitcoin ETF approvals and the influx of institutional capital, especially from TradFi players. So yes, it\u2019s understandable that Bitcoin is moving more in sync with equities.<\/p>\n
But at the same time, I don\u2019t think it fully undermines the \u201cdigital gold\u201d thesis. Fundamentally, Bitcoin is still very different from stocks. It\u2019s not a company with earnings or management \u2014 it\u2019s a decentralized protocol backed by global consensus.<\/p>\n
The increased correlation with equities reflects a broader macro environment and the growing presence of traditional finance. Still, the long-term value of Bitcoin is driven by a belief in decentralization and the idea that it represents an alternative financial system. That\u2019s where the demand comes from \u2014 not just price speculation, but from a vision of the future.<\/p>\n
CN: So even if Bitcoin trades like equities at times, its long-term value isn\u2019t necessarily threatened?<\/strong><\/p>\nHsueh<\/strong>: Exactly. I wouldn\u2019t say it\u2019s 100% correlated with the stock market. The core fundamentals of Bitcoin are very different from equities. It represents a broader consensus about what the future of finance could look like \u2014 decentralized, transparent, and independent of centralized control.<\/p>\nThat\u2019s why even though we see short-term volatility and correlation, long-term believers \u2014 especially those building in the space \u2014 continue to stay. The price will increase over time as more people buy into this vision.<\/p>\n
If you\u2019re building long-term in this industry, you have to believe in Bitcoin and crypto. Otherwise, there\u2019s no point in being here.<\/p>\n
CN: And you personally \u2014 you\u2019re optimistic about this decentralized future?<\/strong><\/p>\nHsueh<\/strong>: Yes, otherwise I wouldn\u2019t still be in this industry. I\u2019ve been in crypto for six years now. At first, I didn\u2019t believe in decentralization much. It felt more like speculation. But the deeper I got, the more I saw what people were building and why they were doing it.<\/p>\nNow, I really believe this is the future of finance. It may not be fully decentralized \u2014 more likely a hybrid of decentralization and centralization \u2014 but change is inevitable. The existing system will evolve.<\/p>\n
<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"
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