Crypto “Received a Good Evaluation” During the Weekend Plunge: Bitwise CIO Matt Hougan

Last weekend, the crypto market experienced its largest leveraged wipeout ever, yet Bitwise’s chief investment officer, Matt Hougan, believes the disruption will not have lasting effects.

In a blog post on Tuesday, Hougan characterized the sudden drop as “a blip” rather than a significant issue. He remarked that crypto “received a passing grade” in its response to the sell-off.

“Many DeFi platforms operated without a hitch: Uniswap, Hyperliquid, Aave, and others reported no losses,” he stated, mentioning that Binance and a few other exchanges faced challenges. “When looked at together, crypto fared as well or better than traditional markets would have under similar circumstances,” he explained.

The crash was triggered by US President Donald Trump’s threat to impose 100% tariffs on Chinese imports, igniting concerns of a potential trade war. Bitcoin (BTC) plummeted nearly 15%, while altcoins like Solana (SOL) saw declines of up to 40%. Approximately $20 billion in leveraged positions were liquidated.

Related: Crypto crash unlikely to disrupt ‘Uptober,’ say analysts

Impact was “contained”

By Monday, Bitcoin had bounced back to around $115,000, nearly recovering its weekend losses. Hougan noted that this swift recovery illustrates the resilience of the blockchain infrastructure. “The impact was limited to individual investors,” he stated, highlighting that no major institutions failed during the incident.

The Bitwise executive suggested that the sell-off was primarily driven by highly leveraged traders rather than any fundamental shifts. He asserted that there had been no changes to crypto’s fundamental outlook, including its underlying technology, security, or regulatory landscape.

“Over time,” Hougan concluded, “I anticipate the market will stabilize and refocus on crypto’s fundamentals. When that occurs, I believe the bull market will continue with vigor.”

Related: Binance introduces $400M program for traders affected by Friday’s decline

Opinions split on historic crypto liquidation

Meanwhile, experts are divided regarding Friday’s unprecedented crypto market liquidation. Some have accused key market makers of executing a coordinated sell-off, while others view it as a natural deleveraging event.

The flash crash caused open interest in perpetual futures to drop from $26 billion to below $14 billion, while trading volume on decentralized exchanges (DEX) soared over $177 billion, and crypto lending fees reached a record high of $20 million.

Analysts from CryptoQuant indicated that the data pointed to an orderly market reset instead of a panic-induced collapse. Of the $14 billion lost in open interest, approximately 93% represented managed deleveraging, with only $1 billion in Bitcoin long positions being liquidated.