Wintermute founder: The "10.11" crash was caused by multiple factors and excessive market leverage

Evgeny Gaevoy, founder of crypto market maker Wintermute, said on a podcast with The Block that he believes the October 11 crash was the result of a combination of factors. For one thing, there's indeed more leverage in the system. For another, the market has expanded with a wider variety of tokens, more perpetual swaps, and more major platforms trading these swaps. Just three or four years ago, we didn't have so many perpetual swaps with massive open interest and the potential for significant crashes. While the market is certainly more mature and sophisticated overall, this development has also created numerous problems. It's still unclear who was "blown up" and who suffered the biggest losses, but I suspect many institutions that suffered significant losses were operating long-short strategies, such as shorting Bitcoin and going long on certain altcoins. They believed this would hedge their risk, but were ultimately thwarted by the ADL mechanism.