Podcast Summary: The Wolf Of All Streets – CryptoTownHall

Episode: $1.1b Liquidated in 24 hours On Crypto Pullback

Date: October 31, 2025
Host: Scott Melker

Episode Overview

In this dynamic CryptoTownHall episode, Scott Melker and a rotating panel of market experts dissect the headline-grabbing $1.1 billion crypto liquidations that occurred within a single day amid a recent market pullback. They explore the mechanics of such volatility, trader behaviors, the influence of leverage, shifting institutional dynamics, and macro narratives. The episode also takes a deep dive into how these moves interplay with longer-standing market cycles, MicroStrategy’s evolving strategy (and credit rating), and the broader implications for both Bitcoin and Ethereum as institutions wade further into the crypto markets.

Key Discussion Points & Insights

1. Understanding the Crypto Liquidation Event

• Volatility & Leverage:

  • The panel discusses how $1.1 billion was liquidated in 24 hours, noting it’s “astounding” to see such figures so soon after a $20 billion liquidation just weeks prior (00:53).
  • Volatility was expected due to $31 billion in contract expirations—largest ever—making round numbers (like $110k) act as “magnets” during expiration days (01:45).

• Market Behavior & Sentiment:

  • Dave: “Every time that happens, you get more and more people who capitulate and give up. ...I’ve seen way more chatter on X about people saying, ‘I’ve had it, I can’t take it anymore. It’s not going anywhere.’” (02:39)
  • There’s a perception that this current fear, frustration, and “dumb takes” often accelerates at market bottoms, while euphoria signals the top (03:50).

• Zero-Sum Game & Winners/Losers:

  • It’s clarified that in liquidations, shorts profit at the expense of longs, and much of the “winning” is done by exchanges who execute auto-deleveraging at market lows (07:04–08:38).

2. Human vs. Algorithmic Trading in Liquidations

• Majority Human-Driven:
  • The consensus: Although algorithmic strategies exist, volume and volatility in major moves are still mostly driven by human decision-making, especially large spot buying (10:20–12:28).
  • “Everyone who thinks that computers are dominating this stuff—they’re not.” (11:37)

3. Cyclical Views & Institutional Adoption

• Four-Year Cycle Skepticism:

  • Iago proposes the stasis in Bitcoin’s price is due to market participants’ hesitancy around the traditional “four-year cycle,” suggesting we’re at a pivotal moment—either it breaks, or is reaffirmed (12:49–16:33).
  • “If we get past that point [year end], we will for the first time ever have actual confirmation that the four-year cycle is no longer the valid way...” (15:50)
  • This is seen as a reason for suppressed volatility and trading volumes.

• Institutional Capital Changing Dynamics:

  • Institutions approach crypto with methodical, volume-based buying rather than emotional or cycle-driven strategies (20:14–20:51).
  • Key Quote: “Most of BlackRock’s buying and selling has nothing to do with anybody at BlackRock at all. ...Hundreds of thousands of clients operating as a crowd.” (21:00)

• Market Psychology & Funding Rates:

  • C.J. emphasizes that, regardless of cycles, “the psychology of the market almost never fails. ...Right now we’re climbing a wall of worry. ...There’s definitely no euphoria.” (22:45)
  • Funding rates serve as signal: extreme rates suggest a reversal is likely.

4. MicroStrategy, Saylor, and Digital Credit

• Credit Rating: A Strategic Milestone

  • MicroStrategy’s new credit rating is seen as a game-changer, laying groundwork for more favorable financing as the company’s Bitcoin holdings dim perceived risk over time (25:35–27:52).
  • “The longer we go without massive drawdowns, the better his credit rating will get...” (26:00)

• Financial Product Innovation:

  • The team distinguishes between “digital credit” (borrowing/lending structures backed by Bitcoin) and “Bitcoin-powered finance” (expanding BTC into other traditional credit products) (29:37–32:37).
  • “Digital credit is solving a cash flow problem... It makes being a saver make sense again.” – C.J. (29:50)

• S&P 500 Inclusion & Passive Flows:

  • A higher credit rating and credible business model may enable MicroStrategy’s addition to the S&P 500, potentially sparking significant institutional and index fund buying (32:42–36:09).
  • “There’s an extremely high likelihood that we see MicroStrategy added to the S&P 500...passive investors are going to need to suddenly acquire large amounts of those shares.” – Yago (36:09)

5. DATs, Market Perception & Marketing Wars

• DAT (Digital Asset Treasure) Companies Landscape:

  • Many DAT firms are attempting to ramp up operations and investor relations, sometimes feeling indistinguishable and lacking true differentiation from MicroStrategy (37:07–41:00).

• Role of Marketing:

  • Expansion of marketing beyond investor relations—MicroStrategy hires marketers to promote new products (not MSTR stock itself), whereas others seem simply to hype their equity (41:49–53:15).
  • “If you’re hiring marketing people to promote the stock of a Treasury company, that’s a cry for help...” – Dave (50:07)
  • Tom Lee’s marketing prowess for Ethereum is emphasized as a key reason for SharpLink’s (and similar) fundraising strength (43:04–45:55).

6. Ethereum’s Narrative vs. Bitcoin’s Treasury Strength

• ETH as a Treasury Asset:

  • Skepticism noted about ETH’s long-term viability as a treasury asset, due to its inflationary structure and competition from other chains (46:33–47:44).
  • C.J. argues: “If you’re in the DAT space...ignore the digital assets and simply focus on Bitcoin. It is in my opinion the only long-term sustainable treasury asset...” (49:38)

• Counterpoints & Tokenization Narrative:

  • Despite the criticisms of ETH, Tom Lee is seen effectively advancing the narrative that “tokenization of every asset under the sun...is gonna happen on ETH” (46:33).

Notable Quotes & Memorable Moments

• On Market Bottoms:

  • “I’ve seen way more chatter on X about people saying, ‘I’ve had it, I can’t take it anymore, it’s not going anywhere.’ ...this feels much more like bottoming behavior than it feels like topping behavior.” – Dave (02:39)

• On Institutional Impact:

  • “Institutions tend to be methodical, they tend to participate based on volume...a different dynamic than FOMO.” – Dave (20:51)
  • “Most of BlackRock’s buying and selling has nothing to do with anybody at BlackRock...” – Dave (21:00)

• On the Four-Year Cycle:

  • “If we get through this four-year phase where people realize the bid on Bitcoin is there...then I think we’re going to see a rush of capital flow back in.” – C.J. (24:52)

• On MicroStrategy’s Credit Rating:

  • “If they get to an investment grade credit rating, they’ll be able to borrow at extremely low rates and buy Bitcoin. ...the best business ever.” – Yago (32:42)
  • “...the next opportunity for Strategy to get listed in the S&P 500 is in December...” – Yago (33:00)

• On Marketing Crypto Companies:

  • “Tom Lee has blown everybody away...he’s way more entrenched with investors worldwide, institutional, than anybody, even Saylor.” – David (43:04)
  • “There is a massive difference between marketing what Saylor is doing and what Tom Lee is doing...” – Dave (50:07)

• On Ethereum as “Gas” vs. “Money”:

  • “ETH decided to compete with Bitcoin as money instead of to be the gas to power the smart contracts...that’s why we have Solana, BNB and all these competitors.” – C.J. (47:44)

Timestamps for Key Segments

• $1.1B Liquidation Breakdown: 00:53 – 04:52
• Market Sentiment & Funding Rates: 04:52 – 05:25; 22:45 – 25:05
• Human vs. Algo Trading: 09:58 – 12:28
• Four-Year Cycle & Institutionalization: 12:49 – 22:17
• MicroStrategy, Credit Ratings, and S&P 500 Potential: 25:05 – 36:09
• DAT Companies & Marketing: 37:07 – 53:15
• ETH vs. BTC Treasury Debate: 45:55 – 50:07

Conclusion

This episode offers a rich, nuanced look at crypto market structure in 2025. The discussion moves fluidly between immediate shocks (like billion-dollar liquidations), deep cyclical theories, the impact of institutional capital, and examples of financial innovation at the intersection of Bitcoin and traditional capital markets. The panel’s perspectives meld macro, technical, and narrative angles, giving listeners both context and actionable insight on what may lie ahead for crypto investors of all stripes.