Institutions Panic📉October 10th Crash Anniversary

0:00 1010 just around the corner is a crashiversary set up for what the market could be facing. Maybe that is why we're seeing the market start to look a little fearful. Today we'll break it down for you. I want to thank our sponsor today and that is Tangem where you guys can get into full self custody.

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0:51 And I want to start with this. And that is the chart.

0:55 Let's go over to the Bitcoin chart right here. And you can kind of see we've put a couple of major events on here. This one is the major event last year that pretty much set Bitcoin in a spiral all the way down to its low at around 60K happening back in June of this year. So you could look at the situation happening back in October of last year as being one of the catalysts that maybe traders are looking at right now. And there's more to this, though, because I think the key is what happens in October? Well, typically you get these October surprises right before midterms or major elections, and that might be actually in play as well.

1:36 So you've got OpenAI and Anthropic, both as well as other AI companies that are now privately preparing for a potential catastrophic AI event that could trigger public outrage. This is a concern to me. nearing, especially getting close to a midterm election. And all of the things that we've seen leading up to this, because there's a lot of things that have been happening with the Hugging Face hack, what we've seen with these rogue AI agents, what we're seeing now with essentially leaders of these companies talking about this, almost as though they're prepping something. And that always concerns me when we have October brewing. And I want to just make Get very clear. I think crypto is actually

2:19 one of the safer places.

2:21 Here's Jesus. He talks about it right here.

2:22 Sold all my crypto, converted it in fiat, putting it back into that 30-year-old banking system. 25, but it's really 30-year-old dated encryption systems. And that's the point, is that the banks may actually become a major vector. If AI is going to have a chance to go in and do something nefarious.

2:41 Where would you go target? I think you would target mainstream.

2:45 Crypto, I think, is ironically in a better place, even though we have seen some challenges in crypto over the past couple of years. I think it's actually in a better place just because of what it means. Now, let's recall what actually happened back on October 10th of last year. At 4.50 p.m., this was October 10th, traditional markets were closed, and then Trump launched a new salvo into the China and U.S.

3:12 Trade war.

3:13 That was the first time we saw a real move into the trade war that put a lot of pressure on China, and immediately underneath that, you had, of course, the market pulling out. So, obviously, what you looked at there that was one of the catalysts is the trade war war that was happening between the U.S.

3:32 And China.

3:32 And this really pointed to the trade deficit. And if you go back in here in 2025, this was, of course, the deepest that it had been. And primarily, this was done because of the front running in the market. What I mean by that is suppliers of all types were buying quickly and as much as they could to deal with what was incoming And that was these trade impacts in terms of tariffs. And of course, all that laid into the market. Then you had the pullback. Everybody thought, oh, it's working. But in reality, it just reset it because that was essentially a supply chain shock that kind of opened up into the market. So in reality, not much better position, but it did damage the market.

4:13 In a big way.

4:14 So when you look at other scenarios that could be impending here, what could hit us on 1010? That's the concern everybody's worried about. Last time, it was tariffs. So not necessarily the case here. Even if you look at the diplomatic agreement for lower tariffs by Canada or with Canada, even that is somewhat reserved. And the point being is that we're aware of these things now. I don't think the market is trying to set this up. So it's going to be something different. if in fact we get any kind of major debauchery happening in the market.

4:46 And that, of course, gets into the next thing.

4:48 And that was the macro shock, because it wasn't necessarily an exchange failure that drove what happened into the $ 19 billion liquidation cascade. In fact, about 75% of that was still in play. The exchange said roughly 75% of the total liquidations had already taken place by the point this was playing out. So you could see this was all about leverage. And I think that's the concern right now we have. I'm not so much concerned about the market right now because the market has been much more resilient in understanding how these things are hitting. I'm more concerned about some sort of unusual activity, whether it's a major hack, some sort of major outage, an issue that could hit the financial system.

5:33 All those kind of things.

5:33 And with the amount of things that we're seeing from AI, this concerns me the most.

5:38 I want to go to a clip real quick.

5:40 And this is Tom Lee talking about what happened in October of last year.

5:45 Take a look.

5:46 In our view, tokenization is a far bigger driver than other bull markets. In 2016, 2017, it was an ICO boom, primarily retail. In the 2019 to 2021 era, it was the NFTs, primarily retail. Last year was a stablecoin boom, but it got cut short because of the October 10th massive debt deleveraging slash auto deleveraging event. But it's different now.

6:11 BlackRock wants to put most of its assets as tokenized assets, and it's a huge addressable market. But just the top three, stocks, bonds, and credits. be $ 160 trillion. For every dollar that's been tokenized or TVL'd on a L1 blockchain, it creates about $ 1 value.

6:28 For the blockchain.

6:29 So if 10% moves on-chain, that creates a $ 16 trillion market. And keep in mind, crypto is an AI downstream story. We've talked about the sport, but as memory and chips corrected, the Mag7 software and crypto should gain, and that's exactly how it's played out.

6:45 And we know why.

6:46 Back to the point there, you do know why. And I think this is the thing. When you look at the market right now, the downstream of it for crypto is very AI-centric. That's where it also gets a little bit concerning. Just as a reminder, what happened on the crash, this was $ 19 billion in terms of liquidations. You also had Bitcoin's open interest, which was rebuilding after its anniversary now.

7:08 But this looks very eerie.

7:10 Right there.

7:11 That's the comparison of this year versus last year. The Bitcoin open interest, 4.1% in five days. We're at 4% in seven. The open interest market cap, 3.7% versus 3.2%. And then ETH open interest at 11.3% versus 10.4%. So I'm not saying that there is anything brewing. What I am saying is that you always have to look at these kinds of components because they are sometimes rhyming in terms of how markets react.

7:39 One good thing is when you look at these.

7:41 Insurance funds that are in these crypto exchanges, Binance, of course, leading the way right there with their insurance fund and the history there, of course, was the 1010 event that, of course, depleted that. It is now pretty much replenished itself. So we're back at another go here, not saying that that would happen. But the point is, is that the market has recovered and been able to deal with this.

8:03 So let's take a look at the crypto fear and greed, because that also kind of has unique alignment here. This was 10.7 right there. You can kind of see the index was around 55. That was when it occurred. We were actually in a good position. I think in general, the market was looking up. And of course, that is when we saw basically a full-blown deflation. Well, we're setting back in at that same period of time, almost at the same exact spot. So All these things, again, start to concern me, especially now that you have new attack vectors that are starting to brew. And that gets into a couple of points. One is Bitcoin ETFs and Ethereum ETFs. This, of course, is spot Bitcoin ETF daily net flows. This

8:46 is the largest outflow since June 25. That's another major factor because now you have institutions absolutely evacuating the market Question is, does this continue for the next few days? Do we continue to see spot Bitcoin ETFs, ETH ETFs starting to outflow and affect the market even further? Even though we nipped around 80K, the real question is, how does this hold over the weekend? So we're going to be watching that one very closely. U.S. hiring stalled at around 29,000 jobs. We're also getting updated data around GDP.

9:21 I think data that comes in right before midterms, this is all somewhat manipulated, in my opinion, because you've got a major election that's going to brew. Now, you have Trump out here on Truth Social, and the one thing he's saying is that, hey, we're not going to be attacking Iran any time prior to the midterm elections. I don't know if that means that we are going to attack Iran, because in most cases, Trump doesn't actually give you the real narrative that they're planning to do for obvious reasons, but the point being is it starts to get into This right here, which is where Trump is hinting at a big surprise to come ahead of.

9:58 The midterm election. What he means by that is still unknown.

10:03 And it's always an October surprise. We've seen this on almost every single election out there. And I think this is another factor that plays into it that we have to consider into the markets. And maybe the markets themselves are a bit spooked in reference to what is happening right now, both on a global side, but also from an investable class side of things. So let's take a look at some of Citrini's research. This is their investable RWA stack. It just shows you the full layer here.

10:30 I mean, these are all the best of the best out there. You've got Securitize leading the way right there. Backpack over there on terms of insurance and legal ownership. You've got the chains and rails distribution, all the major names, Circle and Athena over on the cash and stable coin side, liquidity markets, DeFi.

10:48 You recognize all of these.

10:50 These are the ones I'm concerned with because of the spook that the market could generate here with just any kind of issue that occurs on these kind of dates, and especially when it's this young, meaning just one year ago. And the crypto market Kind of works in these cycles. It's always looking at things just like this because of the sentiment that traders kind of lean in on.

11:11 Another alarming note was this right here.

11:14 And that is Ledger is now getting reportedly hit with another major exploit. And it lost right now around 80 losses were around 86 million. Now, granted, this did not happen from an exploit inside Ledger. This was in one of their supply or one of their resellers. And That's a concern because that tied into a supply chain issue.

11:36 And this is the concern that I always have about these wallets is that if you don't control everything from the soup to the end, you just have problems going forward. One thing I will say is just look at where your source of any wallets come from. Third-party resellers, absolutely a no-go. It has to be direct from the websites.

11:56 or direct from the supplier. And the issue I think you have to consider is just an example of this right here, which is where Ledger's doing some damage control. We recommend Ledger users who purchased from this reseller in the last 90 days to not initiate setup if you've not done so yet. So that's pretty bad for all of these, because all that stock now is dead. That's just dead stock out there. There's going to be sales on it. Watch for any sales. I wouldn't take any sale deals on this. But this is a bad look on Ledger in general, and it hurts, I think, the self-custody market, with the exception of maybe a handful out there that have been able to kind of lock up on being able to create the keys at origination point,

12:37 which is what Tangent is doing.

12:39 So.

12:40 I don't like that in the sense that what we've seen so far is Tangent kind of seem one of the only solutions. Sure, there's software wallets out there, very effective, but even those have a certain amount of attack vector just because of the component of AI and agents starting to move into these.

12:56 So I'm concerned about.

12:57 All of these issues right now. Now you add in the whole issue of the Q Day.

13:03 So you guys.

13:03 Remember we did a video and kind of revealed Justin Drake's statement last week in reference to Q Day and the fact that Ethereum could be in a little bit of a vector problem, meaning an attack issue, still a concern. And they accelerated. That's the biggest concern of all. And I think this has sparked a debate out there online.

13:23 The CEO of Starkware basically said, hey, we're going to be ready, but Ethereum may not be able to beat and prepare fast enough for QDA. A lot of these companies have a stake in the game, all right? They're talking their own book. Just remember that when you're looking at some of these statements out there on X or whatever you guys do in terms of finding your news, because here he is right here getting a lot of inquiries conveniently from custodians and institutional players about this. So this almost looks as though you generate FUD and then you solve the FUD problem. And those are not good things anytime we see that in the market. And we've seen it in all kinds of tech industries from the beginning of security all the way into what we're seeing

14:05 right now in AI. And I think the issue faced with crypto actually is better than that of what we have seen with almost every other system out there. Think of every critical system, banking, power grid, medical, you could name any of them. And I think their attack vector is probably more likely from what we could see on a major AI event than it would be for crypto for one reason. And that is very simple. Crypto is much more nimble, meaning we've already dealt with a lot of this kind of stuff. Most of these L1s are already in play on developing. And the key here is the rollout capability that an Ethereum could do, an Avalanche could do to be able to affect the situation much more efficiently than the supply chain and the layers and

14:55 layers of old technology that is riding across all of these other critical systems out there. So that is a major concern of mine. And I've got a clip here at the end I want to play here because this is Vitalik, and he really kind of hits it home around what Ethereum and or any strategy needs to consider for the future of all of this.

15:15 Take a look.

15:17 What's keeping your personal data safe, for example? That's a question for the operating system. It's a question for any AI you have that is processing the data. It's also a question for the hardware. SI, some people say that it's super intelligence. I think there is another SI that matters just as much. This is element 14 on the periodic table. It's silicon. The silicon that all of our hardware is made out of. Before, we would say, not your keys, not your coins. Soon we're going to say, not your silicon, not your keys. For a system to be secure, the hardware that it is written on and the hardware that links any consequence of the system to the real world must also be safe. We have to think about everything that we build as a full stack

16:04 at every layer, going all the way up to the user, all the way to the left to the chain, all the way to the right to the internet, and all the way down to the hardware. What is a hardware wallet today is going to become the universal secure device of tomorrow. These are big problems that the world will have to deal with and probably many of these problems the blockchain world will have to deal with first. We have seen AIs take down all kinds of websites. We've seen AIs discover bugs and exploits in all kind of software.

16:40 At the same time, Ethereum blockchain has not gone down.

16:44 So what Vitalik was getting at right there, I think is right. And that is not your silicon, not your keys. This is also going to move into other areas of your own personal life. And that's including your data, your thoughts, all sorts of scenarios of your collections. You name anything of value that pertains to an individual. It's going to start to migrate, I think, into maybe a centralized stack, but yet decentralized, and that is in the way of Ethereum.

17:10 So think about that. If you look at the attack vectors that are happening in every major cloud flare, centralized database, all of what we're seeing around banking institutions that are seeing breaches all of the time, the key is if you get a major one, Every time that one of those happens versus every time that it doesn't happen on Ethereum, this is only bullish, I think, for blockchain. And the advancements and the capability of something like an Ethereum, a Solana, an Avalanche, or others are going to be able to deal with a lot of these onslaughts much easier, much more nimble, and much more effective. And I think that is the killer app of what blockchain brings to the market.

17:55 And maybe, just maybe, Wall Street is starting to recognize it as well. If you like this video, hit like and subscribe, drop a comment down below, and also join our free private member group.

18:13 The link is in the description.