Crypto’s Black Friday

The Fortunes of Tomorrow Will Be Built on Compute Power

October 15, 2025 Edited by Alexandra Levis Was this newsletter forwarded to you? Sign up here.  Hi readers,   In today's newsletter, what began as a macro-driven unwind on crypto Black Friday rapidly evolved into a market-wide stress event — underscoring how tightly coupled liquidity, collateral and oracle systems have become, says CoinDesk Data's Joshua de Vos.   Then, HIVE Blockchain Technologies' Frank Holmes writes that in the 20th century, investors who understood energy shaped industries and built massive fortunes. This century, the commodity that matters most is compute, whether you're mining bitcoin or training AI models.   Thanks for joining us.   - Alexandra Levis From the Analyst Crypto's Black Friday The digital asset market faced its largest-ever liquidation cascade on October 10, now being referred to as crypto's Black Friday. Within 24 hours, over $19 billion in leveraged positions were wiped out, marking the single biggest deleveraging event in the industry's history. The sell-off began late in the U.S. session after President Trump announced a proposed 100% tariff on Chinese imports, triggering global risk aversion across equities, commodities and crypto. The steepest declines occurred within a 25-minute window, as high leverage collided with thin liquidity. According to CoinDesk Reference Rates (CADLI), bitcoin fell to $106,560, ether to $3,551, and solana to $174, with smaller-cap tokens dropping more than 75% intraday. Market dynamics & scale of deleveraging According to CoinDesk Data, total perpetual futures open interest fell 43%, dropping from $217 billion on October 10 to $123 billion by October 11. The largest single-day contraction occurred on Hyperliquid, where open interest declined 57%, from $14 billion to $6 billion, as positions were forcefully unwound.  Source: CoinDesk Data   Data suggests that around $16 billion of the $19 billion total came from long liquidations, with nearly every trader carrying 2x leverage or higher with no stop-losses on altcoins being wiped out within minutes. Public blockchains such as Hyperliquid provided a rare, transparent look into the sequence of forced liquidations, where the liquidation queue and execution can be verified on-chain. By contrast, centralised exchanges aggregate and batch liquidation data, meaning the true scale of forced unwinds may have even exceeded the widely reported $20 billion, since grouped reporting often understates notional values. Source: CoinDesk Data Structural stress & order book collapse The episode underscored how tightly coupled liquidity, collateral and oracle systems have become. What began as a macro-driven unwind rapidly evolved into a market-wide stress event. As prices breached key liquidation levels, market depth collapsed by more than 80% across major exchanges within minutes. In some instances, thin order books saw large-cap assets like ATOM temporarily print near-zero bids; a reflection not of fair market value but of market makers withdrawing liquidity as risk systems throttled activity. With collateral shared across assets and venues relying on local price feeds, feedback loops amplified volatility across the ecosystem. Even well-capitalised platforms proved vulnerable once liquidity evaporated across the board.   Fair-value pricing in volatility When exchange-level pricing becomes erratic, CoinDesk Reference Rates such as CCIX and CADLI act as stabilising mechanisms. These multi-venue benchmarks aggregate prices from hundreds of sources, applying quality filters and outlier rejection to produce a global, consensus-based fair value. During Black Friday's volatility, reference rates revealed that market-wide valuations remained far less extreme than certain venue-specific prints suggested. This transparency allows market participants to distinguish between genuine repricing and localised dislocation, providing a neutral reference for post-trade performance assessment. Reference rates don't stop volatility, but they define it – ensuring traders, funds and exchanges have reliable data when the market breaks. Closing thoughts The severe dislocation in the market showed how leverage, liquidity and fragmented infrastructure can converge into a feedback loop that overwhelms even the largest trading venues. It also revealed the limits of transparency in a system where some on-chain exchanges, such as Hyperliquid, expose liquidation flows in real time, while centralised venues still operate as partial black boxes. Crypto's maturity will be defined by how it internalises these shocks. Better risk controls, unified collateral standards and real-time transparency will matter just as much as utilising pricing benchmarks. CoinDesk Reference Rates help confirm fair valuations when screens go red, but true resilience depends on exchange architecture, deeper order books, more robust oracle design and ultimately, exchange uptime. The industry now faces a choice between treating this as a singular event, or as the blueprint for building a market that can absorb the next one.  - Joshua de Vos, research lead, CoinDesk Data Institutional Outlook The Fortunes of Tomorrow Will Be Built on Compute Power Whether measured in exahash per second or in gigawatts, compute has become the essential commodity of the 21st century. Just as crude oil powered the industrial age, compute now powers the digital age. I believe that savvy investors who recognize this stand to benefit the most. Global capital has been flooding into artificial intelligence (AI) and data centers. In June, U.S. construction spending on data centers hit an all-time high of $40 billion, up 30% from the same month last year, according to Bank of America. Governments aren't sitting idly by. Washington recently took an $8.9 billion equity stake in Intel, the UK has pledged billions toward supercomputers and defense budgets around the globe are surging with an emphasis on AI-enabled systems — from drones to satellites. Compute is now a strategic asset, and nations are stockpiling it the way they do barrels of oil and gold.   Sustainable bitcoin mining at global scale Nowhere is this more obvious, perhaps, than in Bitcoin. The world's most secure, decentralized network is built entirely on raw compute power. Bitcoin miners convert energy into digital scarcity, producing the blocks that support a $2 trillion asset class.   We've seen firsthand how compute fuels growth. Last month, we surpassed 20 exahash per second of global mining capacity, making us responsible for about 2% of the Bitcoin network. That translates into roughly nine new bitcoins mined every day, at an efficiency of 18 joules per terahash.  I believe today's investors want more than just returns: they want sustainable returns. That's why green energy — powered by low cost, renewable hydroelectric energy across multiple continents  —  is central to a successful bitcoin mining strategy.  As Bitcoin continues to enjoy adoption, institutional investors should think of the asset as part of a broader allocation to digital infrastructure, alongside semiconductors, data centers and AI platforms.   Compute emerging as the defining commodity of the century It's clear to me that compute is becoming its own asset class. In a recent survey, 95% of major investors told CBRE they plan to increase their exposure to data centers investments this year. In the 20th century, investors who understood energy shaped industries and built massive fortunes. This century, the commodity that matters most is compute, whether you're mining bitcoin or training AI models. It is the foundation of the digital age and the resource that will define this century. By pairing it with sustainable energy,  the potential  long-term value for investors is limitless. -  Frank Holmes, executive chairman, HIVE Blockchain Technologies Keep Reading  News: Fink sees digital assets growing "significantly" over next few years   News: Elon is back in the crypto chat News: This small European nation leads region in bitcoin investment As always, get the latest crypto news from coindesk.com and market updates from coindesk.com/indices. Crypto Long & Short: A newsletter from CoinDesk Were you forwarded this newsletter? 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