Crypto Liquidations Hit $12.5 Billion in October, 74% of Them Long Bets, as Binance Reports Breach

October was a brutal month for anyone borrowing money to bet on crypto going up.

Exchanges force-closed roughly $12.5 billion in leveraged positions during the month. Long positions took $9.213 billion of that, about 74%. Shorts lost $3.29 billion. Longs were wiped out at nearly three times the rate of shorts.

How the month played out

Bitcoin traded between $76,000 and $84,000. Dips below $80,000 set off waves of long liquidations.

The damage started early. Several sessions in the first days of October topped $500 million in forced closures, with spikes around Oct. 6-8 and Oct. 12 as prices pulled back toward the $80,000-$84,000 range. One mid-month stretch logged about $771 million.

Bitcoin had already lost its 50-day moving average and 50-day exponential moving average support on the daily chart before the Binance incident, according to the FX Daily Report's market analysis. Inflation data and signals from the Federal Reserve added to the uncertainty through the month.

Bitcoin and Ether accounted for most of the liquidations. Binance, Bybit, OKX and Hyperliquid led activity, and Binance alone handled roughly half of trading volume.

The Oct. 30 wipeout

The worst single day was Oct. 30. Estimates run from $1.49 billion to $1.67 billion, depending on the data provider. The $1.67 billion figure was 86% longs.

One snapshot counted $1.54 billion across 237,314 accounts, with $1.29 billion on the long side. Bitcoin dropped below $77,000 at one point and was pushed down near $76,400, the bottom of its monthly range. Ether was near $2,231.

The Binance breach

The liquidation spike landed alongside the biggest security incident in the exchange's history.

CNN reported that more than $6 billion was siphoned from Binance in about 20 minutes, in what it described as a suspected North Korean hack. About half the funds were stablecoins, which issuers froze quickly. The rest sat in tokens like bitcoin and ether, which researchers told CNN are likely impossible to recover.

The numbers disagree, and the total loss has not been established. Glassnode's first assessment put the crypto involved at $5.3 billion. Other estimates ran close to $6 billion. Researchers cited by CNN said Binance's actual losses could top $3 billion. Binance said it had frozen $2.54 billion in assets and warned that figure could rise.

Tether CEO Paolo Ardoino said his company froze more than $1.567 billion in USDT tied to the suspected hack. Circle CEO Jeremy Allaire confirmed more than $800 million in USDC frozen in coordination with law enforcement. Glassnode's analysis found Binance's own BNB balance was never touched.

Binance suspended deposits and withdrawals. Co-CEO Yi He pledged the exchange would cover all user losses. Co-founder Changpeng Zhao, who said he no longer manages Binance.com, said it looked like a hack and that, as a shareholder, he expected all user funds to be covered.

Binance holds about $155 billion in user assets, so even a $3 billion loss is a small slice. It still exceeds the $1 billion emergency fund the exchange set aside for events like this. The company says it will cover the gap with that reserve and other assets, and has stressed that "user funds are safe."

On a separate track, a smaller breach hit the prediction market Polymarket the same day. Analytics firm Bubblemaps counted about 700 users losing $2.7 million in unauthorized withdrawals. Polymarket also promised to make customers whole. CNN reported it was the second apparent Polymarket hack since June and was likely unrelated to Binance.

Did the hack cause the selling?

That is not established. The liquidation wave and the breach hit at the same time, and some market commentary ties the two directly. But Bitcoin was already sliding on technical weakness, and analysts note that the timing alone does not prove the exchange's trouble was the cause.

What is clear is the exposure. With about half of volume running through one venue, a security event there reaches traders on exchanges that had nothing to do with it.

Ryan Kirkley, CEO of crypto infrastructure firm Global Settlement Network, pushed back on the reassurance from Binance. "The fact that Binance may have the balance sheet to absorb the damage is encouraging, but I wouldn't confuse financial strength with operational security," he said. "We're talking about the world's largest crypto exchange relying on emergency freezes and reimbursement promises."

His point is that an industry asking institutions to trust it with more capital is leaning on freezes and promises rather than prevention.

What leverage does

The mechanics are simple. A trader borrows to magnify a bet. When the price moves far enough against the position, the exchange closes it automatically, and the trader's collateral is gone. The trader does not get to decide.

October's data shows what happens when a market chops in a range with leveraged longs crowded on one side. Traders who had positioned for an "Uptober" rally got the opposite.

What comes next

The open question is the final Binance loss. Estimates range from the $2.54 billion frozen to more than $6 billion moved. Binance has said the frozen total may rise as its investigation continues. Whether its $1 billion reserve and other assets cover whatever is unrecoverable is the figure to watch as deposits and withdrawals resume.

The market also faces a crowded calendar in the week ahead: nonfarm payrolls, U.S. midterm elections and big tech earnings.