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The cryptocurrency market experienced significant turmoil as Bitcoin 
$103,176 plummeted below $105,000 and Ethereum 
$3,430 slipped below the $3,600 threshold, resulting in a market loss exceeding 5%, valued at $3.53 trillion. The immediate catalyst for this volatility was the expiry of BTC and ETH options contracts worth $5.72 billion on the same day. As the narrative of “Uptober” for October was severely shaken, investors are now considering the possibility of a new market downturn.
Banking Crisis Shakes the Market
Throughout the week, the spotlight was on Western Alliance Bank and Zions Bank as they were implicated in fake credit incidents, which triggered a wave of sell-offs in the U.S. stock markets. The rising concerns over credit quality and the subsequent decline in banking stocks also worried cryptocurrency investors. These events, coupled with a partial government shutdown and weak liquidity conditions in the U.S., markedly reduced risk appetite.
Another factor that shook the markets was President Donald Trump’s announcement of a potential 100% tariff on all imports from China starting November 1. This threat led to a $500 billion withdrawal from the cryptocurrency market. Discrepancies in asset prices like USDe, wBETH, and BNSOL on Binance, Wintermute’s $700 million transfer, and the so-called “Trump insider whale” opening short positions exceeding $1 billion, all contributed to the accelerated market decline.
There are allegations of market manipulation in line with the political calendar, as the same investor had previously sold BTC and ETH before Trump’s announcements.
ETF Outflows and Regulatory Pressure Amplify Market Panic
According to SoSoValue data, there was a net outflow of $536 million from U.S.-based spot Bitcoin ETFs on October 16, which marks the highest daily outflow since August. Additionally, U.S.-based spot Ethereum ETFs saw an outflow of $56.9 million. These negative trends in ETFs indicate a significant decline in investor confidence.
Further deepening the market’s troubles, Deribit saw the expiry of 44,000 BTC and 251,000 ETH options contracts at 11:00 AM Turkish time. The majority of the $5.7 billion worth of options were put options, strengthening bearish sentiments in the market, leading to the liquidation of positions exceeding $1.2 billion.
Additionally, in France, the ACPR regulator’s expansion of its money laundering investigations into exchanges, including Binance, exacerbated the selling pressure. Consequently, Bitcoin fell over 7% to $103,978, Ethereum dropped to $3,696, and XRP decreased to $2.20.
