In just a few minutes, 19 billion dollars evaporated: the truth behind the big dump of alts is not Binance?

On October 11, 2025, the crypto market was hit hard when U.S. President Trump announced a 100% tariff on China, triggering panic in global financial markets and dragging down the entire crypto market. Within just a few hours, over $19 billion in market capitalization evaporated, and contracts worth more than $20 billion were liquidated. Alts were severely hit on exchanges such as Binance, with most coins at one point falling over 90%, and extreme cases of quotes dropping to zero occurred.

But what is the real cause of this disaster? Is there any trace of manipulation behind Binance? Or are structural problems in the entire crypto market coming to light? The views of well-known KOLs and industry insiders reveal the deep-seated systemic vulnerabilities behind this “chain liquidation.”

Is Binance not the culprit? The market maker mechanism is under scrutiny.

Well-known crypto KOL Jerryiscat pointed out in a post on October 11 that the root cause of this big dump of altcoins is not from Binance exchange itself, but closely related to the overall market maker mechanism.

He emphasized: “Binance may not be kind enough, but it is certainly not stupid.” As one of the largest crypto exchanges in the world, Binance's matching system operates stably even during extreme market conditions. The real cause of the liquidity collapse is the highly leveraged Neutral Market Makers and arbitrage bots, which withdraw orders or become active sellers during severe market fluctuations, ultimately triggering a chain reaction of liquidations.

Alts big dump script: A vicious cycle of algorithms and risk control

Jerryiscat outlined the chain of events leading to this big dump:

1. Initial Stage: The market is stable, and market makers and arbitrage bots provide liquidity for both sides of the order book, ensuring smooth user transactions. 2. External Shock: Trump's tariff news triggers a drop in the U.S. stock market, and panic sentiment spreads to the crypto market, particularly affecting the Asian morning at 5 AM (the worst liquidity period). 3. BTC Drop Triggers Liquidation: The price of Bitcoin (BTC) plummets, triggering a chain of liquidations in leveraged contracts. 4. Risk Control Triggered: The stablecoins (e.g., USDT) in the market makers' funds begin to deplete, forcing them to sell positions for self-preservation, which exacerbates the coin price drop. 5. Liquidity Collapse: More and more market makers withdraw orders, buy orders disappear from the order book, while market sell orders surge, and altcoin prices plummet with no buyers to support them. 6. Capital Flight: To replenish the main account, the bots have to liquidate small coins in bulk, turning makers into takers, and the market spirals out of control. 7. Late-stage Intervention and Rebound: Whales and institutions start to intervene, performing stop-loss operations, the market gradually stabilizes, and liquidity slowly recovers.

Order Book vs AMM: Structural Market Risks Emerge

Notable crypto KOL “Crypto Vito” further pointed out that this crisis exposed the inherent flaws of the centralized order book system. He believes that:

The quotes in the order book are not based on actual liquidity support; the prices are merely superficial, and the actual trading volume may not match the depth.

In contrast, on-chain automated market makers (AMM) such as Uniswap quote prices based on the actual depth of the liquidity pool, making it harder to “fabricate” prices and offering greater transparency. VC prefers Order Book because it can create a short-term visual illusion of prices under human intervention, which is beneficial for speculation and market capitalization management.

In short, the order book system is prone to instantaneous big dumps under extreme market conditions due to “quotes without liquidity support,” and there may even be cases where the quotes for tokens such as IOTX or Atom drop to zero.

Does Binance have a “facilitation”? Wei Tuo: Yes, but in a passive role.

When asked whether Binance contributed to this crash, Jerryiscat admitted, “Yes, some brothers definitely did.” Meanwhile, Crypto Weituo added that as the exchange with the largest market capitalization and deepest liquidity, Binance naturally becomes the first venue for price discovery. In extreme market conditions, it will naturally exhibit the most severe price fluctuations.

He also criticized some exchanges for boasting about their risk control, while in reality it is just a delay in price transmission and insufficient hedging mechanisms, misinterpreted as “stability.”

Is a decentralized exchange really the solution? The risks are still evolving.

Although some viewpoints believe that decentralized perpetual contracts (Perp DEX) such as GMX and other AMM platforms can effectively avoid the weaknesses of order book systems, Veto also reminds that the price transmission of oracles in these platforms may still experience delays, and in extreme market conditions, they can still be “pierced,” just in a different form.

He pointed out that if the big dump lasts longer in the future (more than 1 to 2 hours of “stair-step collapse”), then both AMMs and CEXs, as well as small Order Book exchanges, may face more severe liquidity shocks.

In an extreme market, who should bear the risk?

The big dump of altcoins has not only shocked the market but also prompted investors and practitioners to reevaluate the core mechanisms of the crypto market. The leverage risk control of market makers, the vulnerabilities of the order book system, and even the limitations of decentralized mechanisms have all been amplified and scrutinized in this event.

Perhaps the problem does not lie in the quality of Binance or other exchanges, but in the entire system's ability to respond and the risk transmission model under extreme conditions. The most ironic reality is that what truly supports the market is not the risk control system, but whether the trading platform can “afford to lose.”

This article evaporated 19 billion dollars in a few minutes: the truth behind the big dump of alts, and the culprit is not Binance? Originally appeared on Chain News ABMedia.