Bitcoin’s October flush, driven by a Binance glitch and $28B deleveraging, may be over as Cathie Wood sees a shallow cycle, institutional demand, and upside ahead.
Summary
- Binance software glitch sparked a record $28B Bitcoin deleveraging and 14% BTC plunge.
- Wood calls this the “shallowest” four‑year Bitcoin drawdown and sees BTC consolidating €80k–€90k before a new uptrend.
- Institutions now treat Bitcoin as a low‑correlation asset, with ARK targeting a $16T BTC market value by 2030.
Bitcoin’s (BTC) latest shakeout may be over, but the blame game has only just begun. ARK Invest’s Cathie Wood is pointing directly at Binance, arguing that October’s violent “flush” has largely run its course and may have set up the next leg higher for the market’s benchmark asset.
Binance glitch, historic flush
Wood told Fox Business that Bitcoin’s recent weakness “was caused primarily by a Binance software glitch” that unleashed roughly “$28 billion in deleveraging” after the October 10, 2025 flash crash. That episode remains the largest single-day deleveraging in crypto history, with more than $19 billion in leveraged positions liquidated as Bitcoin plunged about 14% from above $122,000 to roughly $105,000, while Ethereum dropped more than 20% in hours.
The selloff began with a surprise U.S. tariff announcement on Chinese goods, but exchange microstructure did the real damage. Reports detail how Binance’s pricing systems “struggled under extreme volatility,” with some tokens briefly trading near zero and triggering cascading margin calls, a dynamic Wood described as a “systemic shock rather than ordinary market volatility.”
“Shallowest” cycle, institutional turn
Wood now argues the worst of the forced selling is behind the market. The Bitcoin “unwind” from October 10 is “largely complete,” she said, adding that the asset is likely to consolidate in the $80,000–90,000 band before resuming its broader uptrend as this four‑year cycle’s downside nears exhaustion. She called the current drawdown “the shallowest four-year cycle decline” in Bitcoin’s history and framed the asset as “three revolutions in one — a rules-based international monetary system, a technological advancement, and the leading asset of a new asset class.”
Critically for ARK’s thesis, Wood insisted that big money is no longer arguing about whether Bitcoin belongs in portfolios. Institutional investors are “no longer debating Bitcoin’s legitimacy” and are instead working on position sizing for what she labeled a “low-correlation asset.” More than 2,000 U.S. advisory firms now allocate to crypto ETPs, up from fewer than 200 before 2024, while custodians hold an estimated 5–7% of outstanding Bitcoin. ARK’s Big Ideas 2026 blueprint pegs potential Bitcoin market value at $16 trillion by 2030.
On her own product, the ARK 21Shares ETF, Wood was blunt: the firm is “in it, to win it,” arguing that support levels should hold as the last aftershocks of October’s deleveraging clear.
Market snapshot: majors in the red
Despite Wood’s optimism, spot prices remain under pressure. Bitcoin trades near €78,700, down about 3% compared with roughly €80,730 24 hours ago. Ethereum changes hands around €2,648, sliding roughly 4% from €2,757 over the same period. Solana trades close to €199, with a mild 24‑hour move of about −0.22% after a 16.5% gain over the past week.
