Crypto Chaos: Mike Novogratz Reveals 30% of Market Makers "Wiped Out" in October Crash
The crypto world witnessed a significant shake-up on October 10th, an event that Galaxy Digital CEO Mike Novogratz describes as far more than a routine market correction. Speaking on the inaugural episode of "All Things Markets" with Anthony Scaramucci, Novogratz disclosed that the crash effectively "wiped out" a staggering third of market makers across various segments of the crypto ecosystem, signaling profound damage to the industry's infrastructure. Novogratz pinpointed a price misfunction stemming from an oracle at Binance as the initial trigger for the widespread liquidations. This error impacted a synthetic stablecoin, setting off a cascading effect that halted traders due to incorrect pricing. The ripple quickly spread into highly leveraged perpetual markets, such as Hyperliquid and Uniswap, where declining prices led to mass liquidations. He emphasized that the prevalent use of extreme leverage by crypto participants, whom he wryly noted "call themselves degens with pride," transformed a technical glitch into a systemic collapse, making perpetual futures particularly hazardous for liquidity providers.
The Path to Recovery: Macro Tailwinds vs. Market Scars
Despite the severe impact, Novogratz believes the market is gradually finding its footing, though not due to a complete healing of sentiment. He attributes the current rebound primarily to broader macroeconomic tailwinds, specifically citing the Federal Reserve's signals towards easing bank cash requirements and plans to reduce interest rates. While he foresees Bitcoin potentially climbing back towards $100,000 by year-end, he cautions that significant selling pressure awaits at that level, indicating a lingering "medium-term damage to the psychology of the market." On the spot market, large-scale profit-taking by early holders has met ETF-driven inflows, a dynamic he views as painful in the short term but ultimately healthy for the market's long-term maturation. Novogratz also highlighted a crucial shift in crypto's perception, moving from a speculative "story" to being evaluated as a legitimate "business ecosystem," demanding tangible utility and profit-making ventures. This evolving narrative, combined with an increasingly supportive macro environment, paints a complex but cautiously optimistic picture for the future of digital assets, assuming the market can truly rebuild its foundations.
