Hint: it means that Hyperliquid already has more real users & organic volume/OI than Binance.
Binance faking liquidation data to understate reality is a widely held consensus view. But has anyone stopped to ask themselves, why?
There are two possible explanations as I see it:
1) liquidation data is fake, because volume & OI data must be real.
2) liquidation data is more likely real, implying volume & OI data is fake.
Both options acknowledge data is getting fudged somewhere - so the real question is - which side of the equation does Binance have more incentive to fudge?
After Aster made evident how easily Binance can generate $100b wash volume, how sure is everyone about the implicit assumption that volume & OI data must be real?
Did Binance Just Socialize Hundreds of Millions in Losses—Triggering a New Wave of Altcoin Liquidations? What does it mean?
As we noted a week ago, during the $19.6 billion crypto liquidation event, long liquidations on Binance accounted for only 59% of all liquidations—far lower than the 90%+ seen on other exchanges.
This divergence highlights the role of ADL (Auto-Deleveraging), a risk mechanism employed by derivatives platforms such as Binance to protect the system when liquidations can’t be filled quickly enough during volatile market moves.
In a crash, ADL may automatically close or reduce profitable positions held by other traders, often market makers or market-neutral funds, to offset the losses of bankrupt accounts.
For hedge funds and market makers holding long-short positions across exchanges, this can unexpectedly break hedges and create sudden directional exposure, turning “neutral” books into loss-making ones.
That’s why we argued this crash was unlikely to produce a V-shaped rebound and would instead lead to further deleveraging, particularly in altcoins.
The 41% of short liquidations remains significant—it may take days or even weeks to understand how and at what levels Binance unwound positions.
Affected funds and market makers are now focused on tightening risk and reducing exposure, likely by selling altcoins rather than seeking fresh profit opportunities.
What does this mean for altcoins: https://t.co/08MJdyCFyY
@Henrik_on_HL I am inherently adverse to zero-fee without nuanced understanding of how the littany of “zero-fee fees” (spreads/depth/funding/etc…) comp to fees on comp fee venues
@JackFarley96@michaeljburry Imagine $NVDA bc outsized index weightings. My personal issue w comps v. prior capex cycles is that AI capex is more similar to WW2 financing than prior business cycles
You thought the team would sell their unlocks? WRONG
You thought the team would collateralize their holdings on the EVM protocols and borrow against it ? WRONG
You think the team will borrow against their holdings on a natively Hypercore designed money market ? You might be correct
Hyperliquid
Have put the trade on many times myself, it crushes in a steady state market, but absolutely not a trade you want to keep on during periods of elevated volatility. Learned this lesson after vaporizing a kucoin account back in 2020
Note from Spencer Hallarn, our Global Head of OTC:
"As equity markets get smashed today, a rather peculiar rally in crypto especially centered in old school tokens: FIL, LTC, NEAR, DOT, ETC. One theory is this could be tied to Oct. 10 and maybe some exchange is repurchasing spot to make folks whole that had liquidations. These moves are unquestionably spot led, which isn't typical with pervasive negative funding across the board."
Have a great weekend.
@cainosullivan Would greatly appreciate any form of this historical data you could share. very l strong intuition that HLP 10x-25x lev would be among most attractive all weather asset in crypto