BitMEX: "Black Swan Event" Causes Market Makers to Hold a Large Amount of Cryptocurrency, Liquidity Hits Lowest Level Since 2022

BlockBeats News, January 8th, according to CoinDesk, the cryptocurrency exchange BitMEX pointed out in its latest report that the "1011" flash crash impact wave hit market makers, forcing them to hold a large amount of cryptocurrency. This flash crash resulted in approximately $20 billion in cascading liquidations, severely affecting market makers' neutral strategy and causing market liquidity to drop to the lowest level since 2022.

BitMEX stated that "when the ADL (Auto-Deleveraging) mechanism is triggered to forcibly close market makers' short hedge positions, these institutions are forced to hold unhedged spot positions in the event of a rapid market downturn. This situation broke the commitment of perpetual contract 'neutral strategy,' causing market makers to withdraw liquidity globally in the fourth quarter of 2025, thereby bringing order book liquidity to the lowest level since 2022."

Furthermore, BitMEX mentioned that with a large influx of imitators, the Delta-Neutral "easy yield" relying on funding rate arbitrage has significantly shrunk, with annualized returns falling to below 4%. At the same time, B-book model platforms have seized considerable profits, the DeFi perpetual contract market remains vulnerable to manipulation, and the traditional financial perpetual contract market has experienced explosive growth.