Buy Crypto- Markets
Futures- Spot
- Copy Trade
- Earn
- More
Tom Lee: 10/11 Flash Crash Explained as Abnormal USDE Plummet on a Certain Exchange Triggering Automatic Liquidations
BlockBeats News, November 23rd, Tom Lee, in an interview with CNBC, explained to the host why the cryptocurrency market experienced a sharp drop on October 11th:
“The cryptocurrency market has a large number of automated processes. ADL (Automatic Deleveraging) is a typical example — when a user's account assets or collateral prices drop, the system will initiate a forced liquidation similar to a margin call in traditional markets.
While USDC maintained a price of 1 USD on other trading platforms, the internal quote on a certain exchange platform plummeted to 0.65 USD. Due to the insufficient liquidity on that trading platform, the ADL mechanism was triggered, resulting in a large number of accounts being automatically liquidated. This chain reaction eventually spread throughout the entire market. Consequently, thousands of cryptocurrency accounts were wiped out within minutes — even though they were profitable just moments before.” Essentially, this was a systemic risk caused by a code flaw: the trading platform was supposed to collect cross-platform price data to set stablecoin valuations but erroneously relied on an internal pricing system.
This incident caused a significant reduction in capital for market makers and trading institutions. More critically, as the shrinking trading volume led to a decline in coin prices, these institutions needed to prepare more capital to sustain operations, forcing them to further deleverage their balance sheets — this was like a vicious cycle that continuously eroded the market foundation.
The essence of the 2009 crisis was the uncontrolled real estate and subprime mortgage collateral, while Wall Street established mechanisms like CDOs to cope with it, the subsequent overregulation had negative impacts. Today, the cryptocurrency sector's ADL code flaws and pricing mechanism defects will also eventually be corrected. Fortunately, we will not repeat the mistakes of overregulation, but we must confront the impact of the liquidation mechanism. The eight-week-long Great Liquidation of 2022 is still fresh in our memory; this is the essence of DeFi: there will inevitably be flaws in the code, and leverage is the true source of risk. Investors should not abuse leverage in the cryptocurrency market."
You may also like
How to balance risk and return in DeFi yields?
Tom Lee's Ethereum Thesis: Why the Man Who Called the Last Cycle Is Doubling Down on Bitmine
Tom Lee is emerging as one of Ethereum’s most influential supporters. From Fundstrat to Bitmine, his Ethereum thesis combines staking yield, treasury accumulation, and long-term network value. Here is why “Tom Lee Ethereum” has become one of crypto’s most watched narratives.
Naval personally takes the stage: The historic collision between ordinary people and venture capital
a16z Crypto: 9 Charts to Understand the Evolution Trends of Stablecoins
Refutation of Yang Haipo's "The End of Cryptocurrency"
Can a hairdryer earn $34,000? Interpreting the reflexivity paradox of prediction markets
6MV Founder: In 2026, the "landmark turning point" for crypto investment has arrived
Abraxas Capital Mints $2.89 Billion USDT: Liquidity Boost or Just More Stablecoin Arbitrage?
Abraxas Capital just received $2.89 billion in freshly minted USDT from Tether. Is this a bullish liquidity injection for crypto markets, or is it business as usual for a stablecoin arbitrage giant? We analyze the data and the likely impact on Bitcoin, altcoins, and DeFi.
A VC from the Crypto world said AI is too crazy, and they are very conservative
The Evolutionary History of Contract Algorithms: A Decade of Perpetual Contracts, the Curtain Has Yet to Fall
Kicked out by PayPal, Musk aims to make a comeback in the cryptocurrency market
Solana ETF News: What Is a Solana ETF and Why Is Goldman Sachs Betting $108 Million on SOL?
Solana ETF news today shows Goldman Sachs disclosed a $108M position while total SOL ETF inflows reached $1.45B. Analysts now expect up to $6B in institutional demand as Solana trades 71% below its all-time high.
Bitcoin ETF News Today: $2.1B Inflows Signal Strong Institutional Demand for BTC
Bitcoin ETFs news recorded $2.1B inflows over 8 consecutive days, marking one of the strongest recent accumulation streaks. Here’s what the latest Bitcoin ETF news means for BTC price and whether the $80K breakout level is next.
Michael Saylor: Winter is Over – Is He Right? 5 Key Data Points (2026)
Michael Saylor tweeted yesterday “Winter‘s Over.” It is short. It is bold. And it has the crypto world talking.
But is he right? Or is this just another CEO pumping his bags?
Let us look at the data. Let us be neutral. Let us see if the ice has really melted.
WEEX Bubbles App Now Live Visualizes the Crypto Market at a Glance
WEEX Bubbles is a standalone app designed to help users quickly understand complex crypto market movements through an intuitive bubble visualization.
Polygon co-founder Sandeep: Writing after the chain bridge chain explosion
Major Upgrade on Web: 10+ Advanced Chart Styles for Deeper Market Insights
To deliver more powerful and professional analysis tools, WEEX has rolled out a major upgrade to its web trading charts—now supporting up to 14 advanced chart styles.
Morning Report | Aethir secures a $260 million enterprise contract with Axe Compute; New Fire Technology acquires Avenir Group's trading team; Polymarket's trading volume surpassed by Kalshi
How to balance risk and return in DeFi yields?
Tom Lee's Ethereum Thesis: Why the Man Who Called the Last Cycle Is Doubling Down on Bitmine
Tom Lee is emerging as one of Ethereum’s most influential supporters. From Fundstrat to Bitmine, his Ethereum thesis combines staking yield, treasury accumulation, and long-term network value. Here is why “Tom Lee Ethereum” has become one of crypto’s most watched narratives.
App