Arthur Hayes Links Altcoin Crash to CEX Liquidations
- Arthur Hayes blames CEX auto-liquidations of cross-margined positions for the altcoin crash.
- The crypto market lost $670B, marking the biggest liquidation event in its history.
- Trump’s 100% tariff on China added pressure, fueling record volatility across exchanges.
A sudden market-wide collapse on Friday led to over $19 billion in leveraged positions being liquidated across major exchanges. According to BitMEX co-founder Arthur Hayes, automatic liquidations on centralized exchanges (CEXs) linked to cross-margined positions drove the sharp declines in several altcoins, many of which dipped over 90% on Binance during the crash.
Cross-Margin Positions Lead to Selloffs
Hayes stated that word on the street points to CEXs auto-liquidating collateral tied to cross-margined accounts, leading to extreme volatility across the market. This mechanism, he explained, caused multiple big altcoins to see fast price collapses before stabilizing shortly after.
Data from Coinglass confirmed that the past 24 hours marked the largest liquidation event in crypto history, with 1,618,240 traders affected and a total liquidation value of $19.13 billion. Coins like IOTX briefly dropped to near zero on Binance before recovering.
The crash followed a surge in volatility triggered by U.S. President Donald Trump’s announcement of a 100% tariff on Chinese imports, intensifying global risk escape. This geopolitical shock accelerated selling pressure in both traditional and digital markets, compounding the effects of CEX-driven liquidations.
Hayes also referenced the automatic nature of these processes, noting that liquidations continued “smoothly” even when order books appeared frozen. During the event, Binance users reported intermittent delays and trading lags, while exchanges such as Coinbase, Robinhood, and Kraken also faced technical disruptions due to increased traffic.
Altcoins Dip Up to 90%, Market Records $670B Loss
According to sources, the crypto market lost approximately $670 billion in total value during the 24-hour period. Several mid-cap altcoins recorded single-day declines exceeding 70–90%, briefly wiping out months of gains. Hayes said that traders who placed deep limit orders, often called “stink bids”, were able to purchase assets at extreme lows.
In his post, Hayes congratulated those buyers, adding that “many high-quality altcoins are unlikely to revisit those prices anytime soon.” This observation came amid comparisons of the current crash to the March 2020 COVID-19 collapse, when a massive liquidation similarly wiped out leveraged positions before a long recovery.
As per analyst Ash Crypto, the COVID crash had recorded $1.2 billion in liquidations, and the FTX collapse reached $1.6 billion, while the latest crash surpassed both with over $19 billion in forced selling. Many analysts have since described it as the biggest liquidation event in the history of crypto.
Related: Arthur Hayes Predicts Trump Shaping Fed Policy by 2026
Hayes Hints at Market Reset
Despite the heavy losses, Hayes compared the crash to past moments of intense market panic. He pointed out that April’s sharp drop turned out to be a good chance for brave investors with extra cash, suggesting this dip might offer the same.
The crash also brought back concerns about cross-margin trading on major exchanges. These systems use shared collateral across trades, which can cause rapid selloffs when prices move suddenly. The quick plunge showed how easily the crypto market reacts to these automated setups, especially during global financial tension.
Meanwhile, Arthur Hayes’ remarks show how centralized exchange liquidation systems contributed to the record $19 billion wipeout. The forced selloffs, compounded by geopolitical shocks and exchange outages, led to one of the steepest single-day declines in crypto history. Hayes’ insights indicate the growing connection between liquidity mechanisms, leverage, and volatility across the digital asset market.
