October 2025 Market Crash Commentary
Dear Valued Investors,
Portal Asset Management’s funds remain stable and well-positioned despite the recent volatility in crypto markets. The weekend’s events highlighted the sector’s ongoing fragility, as excessive retail leverage continues to amplify market shocks. At the same time, infrastructure development in centralised exchanges has not kept pace with trading activity, exposing operational weaknesses across the broader ecosystem. These developments reinforce the importance of institutional-grade custody, infrastructure, and execution — the foundation on which our funds are built.
We can confirm, none of the hedge funds that Portal Digital Fund invests in uses leveraged token exposures to generate returns. Hence we expect the impact of the most recent events to be minor.
Within Portal Radiance Multi-Strategy Fund, we have welcomed the increased volatility the start to Uptober has generated, including the weekend meltdown. For the month to date of October, the Fund has already extracted 3% in additional Bitcoin, while the net asset value (NAV) of the Fund itself is currently up around 1.5%, with the Bitcoin price recovering to $115k on Monday morning, after starting the month at $114k.
Crypto Market Meltdown – a Synopsis
The past 72 hours have marked a seismic shift in crypto markets following President Trump’s October 10 Truth Social announcement of 100% tariffs on all Chinese imports, effective November 1 (or sooner), plus export controls on critical software. This escalation, retaliating against China’s rare earth export restrictions which are essential for semiconductors, batteries, and blockchain hardware, ignited the largest liquidation event in crypto history, erasing over $19 billion in positions across 1.6 million traders.
Markets plunged immediately: Bitcoin crashed from $125,000 to a low of $102,000 before stabilizing at $111,600 (down 10.8%), Ethereum tumbled 12.1% to $3,780, and Solana shed 20% to $178.72. Total market cap evaporated $560 billion to $3.74 trillion, with trading volumes surging 145% amid widened bid-ask spreads.
Amid the broader tariff-induced rout, reports flooded in of extreme flash crashes where select altcoins on centralised exchanges (CEXs like Binance) and decentralized exchanges (DEXs) plummeted 99%, some briefly to near-zero, while stop-loss orders failed to execute. This compounded the $19 billion liquidation carnage, turning automated risk controls into illusions for many traders.
The chaos peaked on October 10 afternoon, as Trump’s announcement triggered a liquidity vacuum: order books emptied as panic selling and cascading liquidations overwhelmed systems. Tokens like Sui, ATOM, and low-cap alts (e.g., meme coins on Solana DEXs) spiked down 90-99% in seconds, per on-chain data. On Binance, the largest offender, users reported frozen interfaces, unprocessed stop-losses, and erroneous last prices due to halted markets and vanished arbitrage. Bybit and Coinbase echoed issues, with withdrawal halts and spreads widening on Hyperliquid. These “wicks” recovered swiftly (e.g., Sui back 80% in minutes), but not before erasing accounts.
Deribit Performed Well
We are pleased to report the main exchange that Radiance uses, Deribit, the leading crypto options and futures platform, handling ~80% of BTC derivatives volume, experienced no major issues, with its trading engine remaining fully operational. There were no reports of frozen accounts, untriggered stops, or 99% token wicks on Deribit; its isolated margin model and robust infra buffered the stress.
We Have Protection for Such Events
It is also worth noting that while the Radiance Multi-Strategy Fund does utilise perpetual futures, these are used to synthetically cover the writing of call options. We further utilise long-dated, out of the money put options to protect the Fund from any risk of liquidations. The net sum effect of these so-called ‘insurance’ puts is to protect the Fund from such a flash crash were the Bitcoin price to decline past $65,000. The Bitcoin intraday wick in this current event, the largest liquidation in cryptocurrency history, was down to $102,000, a modest 18% decline. The Bitcoin price would have needed to fall a further $60,000 or -40% more, before there was any liquidation risk within the Fund.
Positive Developments in October
Outside of this market meltdown, there have also been many positive recent developments worth watching:
- On October 10th, Morgan Stanley announced that they will allow crypto access for all clients (not just high net worth investors) starting October 15th, and its Global Investment Committee now recommends modest crypto allocations – up to 4% for growth portfolios.
- BNY Mellon, a major custodian managing trillions in assets, is experimenting with tokenised deposits and blockchain payment infrastructure. These moves suggest that infrastructure and institutional integration are advancing, not just rhetoric.
- Multiple jurisdictions are advancing crypto-friendly legislation, and the US may be only months away from clearer regulatory frameworks.
- Just 24 hours ago, Nobel Peace Prize laureate María Corina Machado referred to Bitcoin as a “lifeline” in public remarks.
Looking Forward
China’s retaliation could push Bitcoin lower in the short-term. We will continue to monitor up until the Nov 1 deadline, although odds of implementation are ~30% per Polymarket, suggesting bluff potential. Meanwhile, broader inflation fears (tariffs add 0.5-1% CPI) may pressure Fed cuts, indirectly supporting crypto.
Best regards,
Greg Galton
Chief Investment Officer
Portal Asset Management