- Bitcoin’s sudden drop rattled altcoins, but the full impact may take months to show.
- No major exchange collapses yet; better risk controls and automatic deleveraging help contain fallout.
- Rumors blame an overleveraged Asian trading firm, but altcoin losses aren’t tied to Wintermute.
Crypto markets are bracing for aftershocks following last week’s abrupt Bitcoin-driven drop, which rattled the altcoin complex. According to Wintermute CEO Andy, while the immediate turmoil is visible, the full consequences will only surface in the coming months.
He explained, “People do dumb shit in peak bull mania. They always do. Last time we had FTX, Celsius, and others doing all sorts of unsophisticated lending. This time we have DATs buying $SOL above $225, $ETH above $4,000 and $BTC above $100K. Those guys are shaking in their boots right now.” Hence, the market could face delayed but significant repercussions from these risky moves.
Crypto analyst Evgeny Gaevoy, known as wishful_cynic, urged caution regarding exchange collapse rumors. He highlighted that although it is possible “somebody blew up,” there is currently no evidence of broader market spillovers.
Gaevoy compared past incidents, noting that Three Arrows Capital’s collapse after the Terra crash spread quickly through private channels, while FTX’s troubles became evident through bailout talks with Binance. However, he sees no comparable signs in today’s ecosystem, as most leverage comes from derivatives and exchanges now enforce better risk controls, including automatic deleveraging.
Rumors Point to Asian Trading Firm
The rumor mill suggests the last week’s blow-up stemmed from an Asian trading firm overleveraged on precious metals. After a margin call, the firm reportedly liquidated substantial BTC positions via IBIT ETFs. Consequently, the October 10 crash severely impacted altcoins, leaving lingering uncertainty about which firms were most affected.
Despite this, Wintermute maintains that the firm itself was not responsible for the altcoin fallout. Andy stated, “The altcoin complex is fucked, but it’s not because of WM.”
Unlike previous cycles, most exchanges now manage leverage more transparently, mitigating catastrophic risks. Additionally, derivative-based exposure provides clearer visibility into potential losses. Moreover, automatic deleveraging ensures that individual failures do not cascade into the broader market.
