TLDR
- Tom Lee suggests market makers suffered balance sheet damage from the October 10 crash that liquidated $20 billion from crypto markets
- Multicoin Capital’s Tushar Jain observed systematic selling during specific US trading hours, pointing to a large forced seller
- Bitcoin dropped from over $121,000 before October 10 to around $86,900, with the broader market following similar patterns
- Industry observers compare the situation to 2022 when similar liquidity issues took eight weeks to resolve
- No trading firm has publicly confirmed insolvency, but consistent reports suggest positions are still being unwound from the October event
The cryptocurrency market may still be dealing with fallout from the October 10 crash, according to industry experts who point to systematic selling patterns. Tom Lee, chairman of BitMine and co-founder of Fundstrat, told CNBC that market makers likely suffered severe balance sheet damage during the event.
To me, the weakness in crypto has the all the signs
– of a market maker (or two) with a major “hole” in their balance sheet
Sharks circling to trigger a liquidation / dumping of prices $BTC
Is this pain short-term? Yes
Does this change the $ETH supercycle of Wall Street… pic.twitter.com/0jfkXYnfv9
— Thomas (Tom) Lee (not drummer) FSInsight.com (@fundstrat) November 15, 2025
The October 10 crash liquidated a record $20 billion from crypto markets. Lee said this caught market makers off-guard and created liquidity problems. These firms now have less capital to operate and have been reducing their trading activities.
Market makers serve a critical role in crypto by providing liquidity. Lee compared them to central banks in traditional finance. When they pull back, the entire market feels the impact.
Bitcoin traded above $121,000 before the October crash. The price has since fallen to around $86,900. Most other cryptocurrencies followed similar downward trends.
Lee drew comparisons to 2022 when similar issues took eight weeks to resolve. The market is currently six weeks past the October event. He expects a few more weeks of difficulty before conditions improve.
Forced Seller Theory Gains Traction
Tushar Jain from Multicoin Capital observed what he called systematic selling during specific hours. On November 19, he wrote on social media that a big forced seller appears active in the market. He connected this directly to the October 10 liquidations.
Jain referenced his experience from 2022 to explain the timeline. After major liquidation events, it takes time for bankruptcies to reveal themselves. Trading firms need weeks or months to assess their exposure to insolvent counterparties.
Other market participants reported similar observations. LondonCryptoClub noted the constant mechanical nature of the selling during US trading hours. They compared it to large corporate mandates in foreign exchange markets.
Rumors began circulating immediately after October 10. Some reports suggested two large trading firms were liquidated completely. These firms allegedly held portfolios worth over $1 billion in tokens that were cross-collateralized against each other.
Questions About Market Maker Identity
No major trading firm has publicly confirmed insolvency related to October 10. The identity of any forced seller remains unknown. ETF analyst James Seyffart asked publicly if anyone had theories about who might be involved.
Tom Lee stated on November 15 that the price action shows signs of market makers with major balance sheet problems. He described the situation as short-term pain that does not change his long-term view on cryptocurrency markets.
The consistency of reports from multiple sources suggests ongoing position unwinding. Systematic US-hours selling, rumors of cross-collateralized portfolios, and references to balance sheet issues all point to hidden problems. The total crypto market capitalization stood at $3.1 trillion at the time of reporting.
