Big Money Crypto: The State Of The Nation
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Is It All Over?
by Alex King, CEO, Cestrian Capital Research, Inc.
The liquidation event on Friday 10 October was an important day in the crypto investor community. The number and degree of wipeouts isn’t surprising given the reports of extreme leverage amongst holders of altcoins; this is the sort of thing that visits all markets from time to time to remind everyone that there is always risk lurking, and that it can rear its head at a time when folks are least expecting it.
The best blow-by-blow account I’ve seen covering events of that day is “Anatomy Of A Crypto Meltdown” by Molly White. You can read it here.
Molly White
The root cause of the collapse that Friday wasn’t newsflow and it wasn’t unusually timed short trades; these things happen in all securities and commodity markets all the time. The root cause was the combination of (i) the relative immaturity of crypto exchanges and consequent absence of investor protections in the plumbing and (ii) extreme levels of leverage within that system.
I don’t know whether, in fact, substantial numbers of holders have decided to step away from crypto investing and trading; if you believe what you read on social media then that may be the case, but since you can’t believe what you read on social media, it will take exchange- and wallet-level data to evidence any such desertion. What I think we can say with certainty is that many investors and traders will treat crypto with more caution than previously; and some will never return.
This whole sorry saga goes to the heart of our Big Money Crypto work. The basis of our crypto analysis is very simple which is, given the enormous risks involved in trading and investing in crypto, why not de-risk it all by simply adopting the same strategies used by Big Money? And by Big Money I don't mean crypto whales, I mean the old-line money on Wall Street; your BlackRocks and so forth. When BlackRock decided to embrace Bitcoin, it didn’t do so using new systems, it launched an ETF, $IBIT, and chose Coinbase as the custodian. That’s about as low-risk a strategy as it could have taken. It did the same with Ether / $ETHA - again with Coinbase as its initial sole custodian, then adding Anchorage Digital (which is funded by establishment stalwarts such as Goldman Sachs, KKR, Andreesen Horowitz and so forth).
BlackRock offers no ETFs for coins with market caps below Ether.
To make money investing in something, it helps if it has a long-term price growth curve and supporting logic. And to make money trading something, a little volatility helps. Here’s Bitcoin and Ether since the 2020 Covid lows.
Given that you have enormous price growth in only five and half years, and a tremendous level of volatility too - and given you can access these instruments via large, liquid ETFs (IBIT stands at $87bn AUM, ETHA at $15bn AUM), I am not sure why a serious US investor would bother with the risk inherent in smaller coins and nascent exchanges.
Solana, I think, may fall by the wayside as an investable proposition for the cautious. That may change when true Solana ETFs launch, but the use-case for Solana doesn’t roll off the tongue as easily for Wall Streeters as does Bitcoin or Ether. The most traditional of investors can understand that BTC offers a store of value outside banks, a way to transmit value outside of the same, and as a trading instrument. Those same investors can understand that Ether is in demand so that transaction processing fees may be paid for the Ethererum blockchain upon which is hosted an increasing number of tokenized asset systems. But Solana? Harder for Wall Street doyens to understand why it’s needed. I think we may see a concentration of value in Bitcoin and Ether at the cost of the long list of altcoins, from Solana on down.
Managing Crypto Risk
The extreme volatility you see in the chart above is both the source of upside and potential ruination. If you want to trade crypto successfully, I think you need sharp skills to do so. It’s more difficult than the S&P or the Nasdaq; more upside to date of course, so why would it not be more difficult?
There are no fundamentals associated with Bitcoin or Ether, no cash generation (Ether staking yield is paid in Ether), so you can’t come up with some kind of “this asset should be worth X, it’s currently worth Y, so I will buy, or sell, accordingly”. The only way to trade successfully is some method of technical analysis - charting - or some kind of help from machines.
If you don’t already subscribe to our ‘Big Money Crypto’ algorithmic signal service, I suggest strongly that you check it out.
The Big Money Crypto Signals utilise proprietary machine learning techniques, combining both macro-driven data and asset-specific price technicals to generate daily risk signals for Bitcoin, Ether, Solana, Coinbase, and Robinhood. This is something that was previously available only to institutional investors on Wall Street.
The Bitcoin signal launched in mid-April has captured the risk-on rally from the start, delivering a 67% return over the past 5 months. The signal has outpaced the Buy-and-Hold strategy by 5% in this period.
While the Ether and Solana signals were launched only in July, they have already outperformed the Buy-and-Hold strategy by 8% and 9% respectively.
And here’s what happened on the morning of Friday 10th October.
The Big Money Crypto Signals sent advanced warnings during early European hours, helping subscribers to dodge one of the most significant liquidation events in crypto's recent history.
Moreover, the additional daily metrics around the signal help subscribers gain greater context of the current risk regime, enabling longer-term investors to assess the stage of the bull/bear market more accurately.
Finally, the author of this quant system, Yimin Xu, provides regular commentary and weekly webinar videos on both macro and individual tickers every Friday, helping to end the week with clarity and confidence.
You can learn more and sign up for the signal service here (if you’re an independent investor) or here (if you’re an investment professional).
This Big Money Crypto note today was a no-paywall publication. We’ll have more for you later this week covering SharpLink Gaming ($SBET), which despite its recent stock price pressure is, I think, shaping up with some ambition.
Cestrian Capital Research, Inc - 23 October 2025
DISCLOSURE: Cestrian Capital Research, Inc staff personal accounts hold long positions in, inter alia, $IBIT, $ETHA, $BMNR, $SBET, $ETHZ .