X @Raoul Pal

Market Event Analysis - A major cryptocurrency exchange, Binance, experienced API issues leading to market maker shutdowns and widespread liquidations [1] - Many market makers were unable to provide sufficient liquidity to support the market [1] - Exchanges with internal market makers or price backstopping capabilities absorbed significant liquidation volumes, particularly in small-cap and major cryptocurrencies [1] Liquidity and Risk Management - Entities that backstopped prices during the market disruption are now unwinding their positions, involving tens of billions in liquidity [2] - The unwinding process involves de-risking strategies, similar to program trading liquidations, to minimize market impact [3] - Current market illiquidity is amplifying the impact of de-risking activities [3] Year-End Considerations - Year-end audits and market liquidity constraints are driving the need to complete de-risking activities promptly [3]