🥛 $1T wiped from markets. Now what? 🚨

GM. This is Milk Road, the newsletter that opens up old wounds from its school years, so you can better understand crypto.

(It’ll make sense once you read the first article.)

Here’s what we got for you today:

✍️ $1T wiped from markets. Now what?
🎙️ The Milk Road Show: Ethereum Will Break All-Time Highs by the End of 2025 w/ Milk Road PRO
🍪 Binance paid $283M to users hit by Friday’s depegs

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Prices as of 2:00 PM ET, provided by CoinGecko.

$20B LIQUIDATED. $1T WIPED FROM MARKETS. NOW WHAT?

You know that one kid with behavioral issues from primary school?

(The one that’d go round the schoolyard kicking unsuspecting victims in the nuts?)

At my school, that kid was Dale.

And on Friday, the global financial equivalent of ‘Dale’ was set loose on markets – no one’s nuts were safe (especially those of crypto holders).

Here’s a beat-by-beat (accidental pun, leaving it in) of everything you missed, and what comes next.

1/ “No rare earth minerals for you” – China, to the rest of the world

On Thursday October 9th, China announced that it would be putting export controls on its rare earth minerals (which play a large role across major industries, especially tech).

Source: @aphysicist

All of this (👆) = rage bate, custom tailored for President Trump.

As a result, we got this the following day. 👇

2/ Trump announces tariffs on China

At 4:52 pm ET on Friday, October 10th, President Trump announced 100% tariffs on China would begin as of November 1st.

Source: @WhiteHouse

3/ Cue the liquidations

Even though we’ve seen this movie before, the market seemed to have forgotten how these narratives tend to play out (threat → negotiation → de-escalation.)

Instead of remembering this and holding firm – panic ensued, with the market selling off at a breakneck pace, liquidating leveraged longs left, right, and center.

Here’s a quick refresher on how that process tends to work…

Say a trader puts down a $10k bet, with 10x leverage. That means they’re taking out a $90k loan to 10x their bet from $10k to $100k.

If prices go up, say, 10% – their position is now worth $110k, meaning they can sell → pay back the $90k loan → and pocket the remaining $20k (doubling their initial $10k.)

…but if prices go down 10%? Oof. Not good.

That $100k is now worth $90k, at which point their chosen trading platform will automatically sell (liquidate) the position → return the $90k to the lenders → and the trader will lose all their money.

(The faster prices fall → the more liquidations are hit.)

And in this case, total liquidations reached nearly $20B within 24hrs:

Source: @joemccann

These were record breaking numbers, in the worst way possible.

For context: when FTX collapsed – it triggered ~$2B worth of cascading liquidations.

On Friday, we damn near 10x’d those numbers.

And all of this forced selling had an immediate impact on crypto prices.

Keep scrolling to the next article to get an idea of just how much. 👇

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$20B LIQUIDATED. $1T WIPED FROM MARKETS. NOW WHAT? (P2)

Where were we?

Ah yes, Dale meet nuts. Nuts, meet Dale.

4/ Crypto prices nuked across the board

The effect these liquidations had on the crypto market goes a little something like this…

$890B was wiped from the total crypto market cap on Friday alone, with the total change from Monday’s high to Friday’s low hitting -$1T.

That’s a ~25% decline, across the entire crypto sector, over a 5 day period.

(F*cking Dale!) 👇

Source: TradingView

As for token prices themselves? The 7-day chart patterns across most major tokens all tended to follow a similar pattern:

Source: Coingecko

…and of course, the chaos wasn’t just limited to the charts.

There were rumors of insider trading:

Source: @coffeebreak_YT

As well as emergency measures being triggered across multiple perp platforms that essentially forced short sellers to close their trades and buy back the crypto they’d borrowed/sold – as there wasn’t enough people trying to buy the crypto being sold off by leveraged longs.

(You can get a closer look at how that played out here.)

5/ The rebound

As we said earlier: we’ve seen this movie before – we know how it usually ends. And this time seems to be no different.

Around midday yesterday, we got this:

Source: @TrumpTruthOnX

Lifting prices in the process…

Source: @MilkRoadDaily

Enough that a good chunk of major tokens are now back to where they were just two weeks ago:

Source: TradingView

6/ Ok, where to from here?

Right. So the bell has rung, lunch is over, and Dale looks like he’s headed for the principal’s office…now what?

Our crystal ball is currently in the shop, so in the short term, we’re playing it by ear – but in the medium term (call it Q4), we’re still bullish as ever.

Leverage has been shaken out of the system and the fundamentally strong assets/platforms have seemed to have weathered the storm.

One point of concern that’s still on our radar is the chance that this shock could have led to a collapse of a major platform or market maker (the news of which may yet to have broken).

But that’s just an edge case. For now, we’re still confident that Q4’s got the goods.

In fact, to give you an idea of just how confident we are – we’re willing to make you a bet:

If $ETH doesn’t hit a new all-time high by Dec 31st, we’ll give a full refund to anyone that signs up for Milk Road Crypto PRO or All Access between now and Saturday, Oct 18.

(Oh, and a flat 20% discount up front.)

Phew. Ok, we got through it. Now it’s your turn to take the mic…