Data & Insights: Crypto Industry Sees Record-Breaking Liquidations

Predicting Billions in Funding

• Prediction markets continued to run hot last week, with Kalshi and Polymarket both announcing new raises. 
  • Polymarket raised $2 billion from the Intercontinental Exchange (ICE), placing the platform at a $9 billion valuation. Kalshi secured $300 million at a $5 billion valuation.
  • The funding rounds have minted at least one new billionaire, with Bloomberg reporting that Polymarket's Shayne Coplan became the youngest self-made billionaire following the raise.
• Last month, Kalshi captured a peak 60% market share against Polymarket in September, marking a significant reversal from earlier in the year when Polymarket dominated trading activity.
  • The two platforms combined for a record-setting $1.44 billion in volume during September, reflecting surging mainstream interest in prediction markets as a new speculative venue.
  • This volume spike comes as both platforms secured substantial funding rounds last week, signaling strong institutional confidence in the sector's growth trajectory.
• An important technical distinction separates the two platforms' approaches to market infrastructure.
  • Kalshi operates off-chain, with market data accessible through traditional API integrations, leading some stumped on how to verify their stats. Polymarket operates fully on-chain, where markets and positions are publicly available on the blockchain.
• Kalshi's recent volume surge is partly linked to its partnership with Robinhood, which now allows users to place sports bets through Kalshi directly within the Robinhood interface.
  • This integration provides Kalshi with access to Robinhood's substantial retail user base, potentially explaining the platform's growing market share.
  • The partnership demonstrates how prediction markets are becoming increasingly embedded in mainstream trading platforms, moving beyond crypto-native audiences. 

Liquidation Final Boss 

• This past Friday delivered the most severe liquidation events in crypto history, with nearly $20 billion in forced position closures across centralized and decentralized exchanges as markets shed approximately $200 billion in total valuation.
  • While the dust is still settling, many point to President Trump's comments about tariffs on China spooking equities and crypto markets, ultimately leading to a massive unwinding of perpetual (perp) positions. 
  • To put this in context, the FTX crash saw $1.6B in liquidations, making this magnitude bigger with Bitcoin dropping as low as $107,000 on most exchanges.
  • We do note here that $20 billion is a conservative estimate, as various exchanges such as Binance have greatly limited the liquidation data they report. 
• The scale of the liquidations suggests potential involvement of larger institutional players or market makers, whose sizable positions may have amplified the cascade effect.
  • Liquidations occur when a trader's margin account can no longer support their open positions due to losses, forcing exchanges to automatically close positions to prevent further losses beyond the deposited collateral.
  • When long positions are forcibly closed, they effectively become market sell orders, creating additional downward pressure on prices. This is particularly pronounced in crypto markets due to relatively thinner liquidity compared to traditional assets.
  • As prices decline and trigger more liquidations, each wave of forced selling pushes prices lower, triggering subsequent liquidation thresholds in a self-reinforcing cycle unique to leveraged crypto trading.
• The severity of the drawdown was extraordinary, with some altcoins dropping to $0.01, representing near-complete price collapses never before seen even in crypto's volatile history.
  • Traders using cross margin, where all assets in an account serve as collateral for leveraged positions, faced particularly harsh outcomes, with some losing significant spot holdings that were pledged as collateral for their leveraged trades.
• Decentralized protocols like Hyperliquid and AAVE remained fully operational throughout the event, demonstrating notable resilience during the chaos.
  • The performance of DEX infrastructure under extreme stress conditions marks a significant maturation of decentralized trading systems, which historically struggled during periods of high volatility and network congestion.
  • This resilience may encourage more traders to consider decentralized alternatives, particularly for risk management during periods of market stress.

TopMonkes

• As Bitcoin rallied towards a new all-time high (ATH) just two weeks ago, NodeMonkes, the Bitcoin ordinals collection, has since recorded its two consecutive highest weekly sales volumes for the year.
  • In the week Bitcoin set its ATH, NodeMonkes recorded $2.99 million in volume, while the prior week printed $2.38 million.
  • These are the collection’s strongest weekly totals since December 2024, when Bitcoin also recorded its, at the time, new ATHs
  • Interestingly, NodeMonkes’ peak trade volumes also occurred in late February to Early March 2024, when Bitcoin first surpassed its 2021 high.
• The correlation between NodeMonkes picking up trade volume whenever Bitcoin makes a new all-time high is undeniable
  • Spikes in NodeMonkes’ trade volume are often followed by near-term BTC pullbacks.
  • For example, after the first week of March 2024, BTC fell by over 10% the following week.
  • A similar NodeMonkes volume surge in late December 2024 preceded another ~10% BTC decline the next week.
  • Most recently, the week NodeMonkes recorded its highest yearly trade volume coincided with one of the worst crypto market-wide selloffs in history as Bitcoin fell by over 12% in a single day.
• While correlation is not causation, NodeMonkes seem to have become a “top indicator” of sorts, acting as a late-cycle sentiment gauge.
  • When flows rotate from BTC into higher-beta Ordinals collectibles, it often marks frothy conditions and a greater risk of a near-term cool-off in BTC.
  • And while caveats apply and the sample size is small, the signal has been notably consistent enough to monitor in the future.

Expanding the Galaxy

• Galaxy Digital (NYSE: GLXY) has been performing exceptionally well in recent months, even when benchmarked against Bitcoin.
  • Since mid-May 2025, GLXY is up by over 72% against Bitcoin.
  • This makes it one of the best performing “crypto-adjacent” stocks in this period, beating out others such as MSTR and COIN.
• There are a few reasons why GLXY may have performed well in this period.
  • One of the biggest reasons is the completion of the stock’s U.S. listing in mid-May, improving access for institutions that could not trade the Canadian line and generally having access to a far larger and deeper pool of liquidity.
  • The other reason is GLXY’s business expansion into other segments such as data centers, stablecoins, and consumer-facing apps.
  • For example, GLXY has expanded into data centers with a $1.4B project facility and CoreWeave as an anchor customer for initial capacity.
  • It also launched a GalaxyOne app for its consumer-facing segment, as well as an upcoming joint venture for a MiCa-compliant Euro stablecoin.
  • These developments mean several potential paths to revenue rather than a single dependency on crypto prices or volume.

Stable Coins, Stable Growth

• The number of unique stablecoin senders per week on Ethereum has increased at an exponential rate in the last 12 months.
  • From January 2020 to July 2024, there was an average of ~400K stablecoin senders on Ethereum per week.
  • Since August 2024, this figure has grown by over 1.7% per week on average, consistently setting record highs.
  • In 2025 so far, there have been, on average, 720K unique stablecoin senders on Ethereum per week
  • While in the past two weeks alone, this number has surpassed 1 million weekly unique stablecoin senders.
• The surge in unique stablecoin senders is primarily a function of rising stablecoin adoption
  • For example, in countries with shaky forex or capital controls, stablecoins are the practical dollar.
  • Moreover, perps, prediction markets and most RWAs all fund and settle in stables, so every new season or app spins up fresh addresses.
  • Meanwhile, Ethereum, as the L1 settlement venue, captures the onboarding, rebalancing, and payout flows that translate into many new stablecoin senders.
• In summary, stablecoins are becoming a mainstream payment and settlement rail
  • Barring a major policy or peg shock, we expect this metric to continue up-and-to-the-right as merchant payouts, remittances, and app incentives scale