Crypto investors got the scare of their lives last weekend. That, Bhutan’s move to the blockchain, and asset investment dominated Web3 minds this week.
Crypto investors get early Halloween scare
“The bloodbath we saw in markets over the weekend is a brutal reminder that, as the crypto market grows and matures, the risks are amplified. The arrival of spot crypto ETFs and institutional interest has lulled investors into a false sense of security, but it remains the only market that trades after hours. In this environment, thin liquidity, overleveraging, and the involvement of large players create a toxic cocktail.
“The biggest shock over the weekend was that traders were forced out of even profitable positions due to auto-deleveraging (ADL) on exchanges – a risk management mechanism that most will have not even heard about. It’s a blunt instrument that certainly deserves some scrutiny as exchanges conduct reviews of this mass liquidation event. At the very least, traders must be more aware of this risk before committing to leveraged or long/short trades.
“Ironically, now that the dust has settled, many blue-chip tokens have seen a strong rebound – including Ethereum, which is looking particularly strong back above $4,000. As such, many spot investors find themselves in a similar position to where they were before the flash crash. This is certainly an argument against excessive leverage in a market with fluctuating liquidity in such an uncertain geopolitical climate.
“The good news is that this has cleaned out the excessive leverage and reset the risk in the market, for now. However, Bitcoin now faces another uphill battle to break past key resistance levels that will allow it to reach a meaningful new all-time high this year.”
– Nic Puckrin, crypto analyst and co-founder of The Coin Bureau
“The mass liquidation event on Friday revealed the extent of the leverage in the digital asset market. Investors were getting overconfident, and this led to the biggest liquidation cascade the crypto market has ever experienced.
“Eventually, even traders in short positions were liquidated on crypto exchanges. There were very few places to hide as digital assets absorbed the brunt of the China tariffs announcement on Friday evening.
“Forecasting the market’s movements during a flash crash like this is about as effective as reading tea leaves to predict one’s fortune. When volatility spikes the way it did on Friday, the best investment approach is a defensive one.
“With whales now controlling so much crypto liquidity, the risk of mass liquidation events has increased. This sell-off is a wake-up call for traders that high leverage is a very dangerous game in a market this illiquid and this close to a cycle top.”
– Lucas Kiely, CEO and founder of Future Digital Capital Management
“The enormous market sell-off we saw over the weekend is another indicator of why stable assets are so important in any kind of investor’s portfolio – whether that be crypto or traditional finance. Though perhaps crypto is still significantly more vulnerable, thanks to what is still a huge liquidity issue.
“It’s also a testament to why gold is at an all-time high, up 1.44% today to over $4,074. While holding gold is a safe bet, though, it’s essential that investors can start doing more with it rather than simply holding it to preserve purchasing power, which, of course, is eroded over time thanks to inflation.
“Gold has had an incredible run over the past year. However, it typically doesn’t, and it’s extremely important that investors are able to start earning on this asset in diverse ways when we look at the absolute carnage that the weekend brought to all markets.”
– Kevin Rusher, founder of RAAC
“The recent market crash saw one of the largest liquidation events in crypto history, with more than $19 billion wiped out in 24 hours. While this industry has matured at an incredible pace, moments like this remind us that, when we zoom out, we’re still only scratching the surface of what crypto and emerging technologies will become.
“We build because there are fundamental problems that need solving. For Naoris Protocol, that means ensuring digital infrastructure can survive quantum threats, removing single points of failure, and creating decentralized trust where none exists today.
“These challenges don’t disappear when markets shift. They become more urgent. To our community and fellow builders: conviction in the long-term impact of what we’re creating is what truly counts. Let’s get back to building. The future still looks brighter than ever.”
– David Carvalho, founder and CEO of Naoris Protocol
“Yes, the recent sharp selloff and liquidation event marked one of the largest single-day drawdowns in cryptocurrency history; however, it also highlighted the market’s swift stabilization, showcasing the growing maturity and resilience of the current crypto markets.
“Unlike past cycles marked by panic-driven crashes, we witnessed significant institutional buying support that quickly established a strong price floor. The data shows a rising percentage of institutional investors increasing their crypto allocations, backed by improved liquidity, greater regulatory clarity, and the presence of spot Bitcoin ETFs.
“Retail investors are also approaching these events with more composure, with surveys indicating many buying the dip instead of exiting. For us, this recent volatility acted as a critical stress test, and the market’s ability to absorb the shock demonstrates a digital asset ecosystem increasingly capable of withstanding turbulence.
“Overall, the crypto space is no longer a speculative playground but a more stable, institutionally embraced market poised for sustainable growth.”
– Syed Hussain, founder and CEO of SHIZA
“The recent market correction was a wake-up call for how fragile liquidity still is across token markets. When volatility spikes, access to capital often just disappears, which shouldn’t be the case in a supposedly open financial system.
“What’s missing isn’t just liquidity, it’s the ability for any token, not just the big ones, to plug into permissionless margin trading and lending. That kind of infrastructure would let risk actually move where it’s supposed to, instead of bottlenecking in centralized venues.
“I’m not saying it solves everything, but having open, composable leverage markets feels like a crucial next step if we ever want tokenized assets to behave like real financial instruments, not isolated silos.”
– Sky, founder of LIKWID
“Friday’s crypto crash, if anything, was a market reset as excess leverage got washed out. It also proves that institutional interest in crypto is stronger than ever, with IBIT crossing $100B in AUM.
“Trump’s 401(k) crypto policy solidifies the core argument that Bitcoin’s future is productive deployment in institutional-grade infrastructure. The caveat is that retirement fund fiduciaries are no longer interested in just holding Bitcoin like an idle asset. They’re looking for yield generation and assets that support this, coupled with long-term wealth-building security.
“Trump’s new executive order could indeed unlock and generate trillions in retirement assets for Bitcoin deployment. However, the compliance infrastructure needs must be met. So, think fiduciary standards that provide transparency, risk management, and, furthermore, reliable governance that retirement plans require.
“The market has been gearing up for this massive change as Bitcoin shifts from a speculative or risk asset class to retirement-grade productive capital. Institutions are clearly focusing on risk-adjusted yield.”
– Thomas Chen, CEO of Function
Why stable assets are so important in any investor’s portfolio
“The weekend market rout and speed of the selloffs caught everybody off guard. It’s a reminder that stable assets matter a lot and you can’t just chase upside forever without some kind of anchor in your portfolio. When liquidity dries up and everyone’s trying to exit at once, the only thing that keeps markets sane is structure. That’s why, in my opinion, we really need a unified liquidity layer, something that connects tokenized assets with real derivatives infrastructure.”
– Hedy Wang, CEO and co-founder, Block Street
“Stability is the foundation of conviction. Every investor, whether retail or institutional, needs a ballast in their portfolio – something that doesn’t react emotionally to volatility. Stable assets like gold, treasuries, or digital dollars give investors breathing room to think long-term rather than panic short-term.
“The irony is that stability isn’t boring anymore; it’s become the most innovative part of finance. In a world where yield and safety are finally converging, holding stable value is no longer defensive – it’s strategic.”
– Sid Sridhar, founder and CEO of BIMA Labs
Bhutan has announced the migration of its national digital identity system to Ethereum
“A nation adopting Web3 technology for core government interaction is a welcome development, and Ethereum certainly gives a broad range of compatible applications that can be used in this context. However, Ethereum’s architecture does not shield metadata, allowing for such government IDs on the network to be easily tracked by other individuals and third parties.
“A smarter design would combine the power of Ethereum’s application ecosystem with a privacy-preserving ZK protocol to protect government IDs while enjoying the richness and breadth of Ethereum.”
– Eran Barak, CEO of Shielded Technologies
“Bhutan’s National Digital Identity program represents an important step toward digital modernization — but it also underscores one of the biggest tensions in technology today: the balance between digital efficiency and individual privacy.
“Centralized identity systems, even when implemented by well-intentioned governments, create highly attractive targets. A single breach can compromise millions of citizens’ most sensitive data — permanently. In an era of AI-driven attacks and emerging quantum capabilities, such systems must evolve beyond centralized storage and verification.
“The future of identity lies in decentralized trust models, where users control their own cryptographic proofs without exposing personal data. Technologies like zero-knowledge proofs (ZKPs) and post-quantum cryptography can enable verification without surveillance — allowing governments to confirm ‘who’ without needing to see ‘everything.’
“At Naoris Protocol, we believe the next generation of national identity systems must be privacy-preserving by design — distributed, verifiable, and resistant to quantum and AI-based threats. Bhutan’s initiative shows progress, but it also highlights the urgent global need to build digital identity frameworks that empower citizens, not just register them.”
– Carvalho