Crypto’s Post-Crash Reset Extends Beyond Bitcoin Leverage

A year after a record $19 billion in leveraged bets were liquidated in one day, crypto markets are still rebuilding. Bitcoin remained more than 30% below its record high, and traders had been slow to restore leveraged positions, Bloomberg reported.

Open interest in Bitcoin perpetual futures, a measure of leveraged trading, was about $45 billion before the crash, according to CryptoQuant data. It more than halved over the following six months. Bitcoin’s rally above $80,000 later restored some confidence, but open interest remained well below its peak.

Lower leverage and stronger liquidation systems may offer some protection, but Caladan president Julia Zhou said liquidity could still dry up quickly. She also described the market as “highly fragmented.”

Trading is expanding beyond tokens. Open interest in perpetual futures tied to real-world assets, including stocks and commodities, topped $17 billion, according to DefiLlama. Hyperliquid, an offshore crypto exchange, drove much of that growth.

QCP Capital said it expected Bitcoin to trade between $80,000 and $90,000 in the fourth quarter, adding that flows alone would not be enough without a major catalyst. Galaxy Digital said the market had changed substantially since the crash, as federal regulators move ahead with plans for trading guidelines on collateral and margin.

Crypto is becoming more connected to traditional finance, with firms exploring stablecoins, tokenization and blockchain-based financial infrastructure. Galaxy Digital’s Lucas Tcheyan wrote that the market that replaced the one that crashed “is just starting to get priced in.”