Weekly Update: 17th of October
What happened between the 10th and the 17th of October?
- In a very short timespan, a flash crash liquidated roughly $20 billion in positions, and the market continues cautiously with sentiment still shaken. Read more
- US government seizes $15B in Bitcoin in largest-ever crypto confiscation, strengthening its holdings without purchasing on the open market. Read more
- Bhutan migrates national identity system to Ethereum, becoming first country to adopt public blockchain for decentralized population-wide identity verification. Read more
- BlackRock CEO Larry Fink champions tokenization as strategic priority; Ark Invest’s stake in Securitize affirms institutional momentum toward digital asset infrastructure. Read more
Crypto market suffers flash crash after multibillion-dollar liquidations
The crypto market was shaken last week by a sudden flash crash, with total liquidations estimated between 15 and 20 billion dollars. The trigger was an escalation in the trade war between the United States and China, after Trump announced 100 percent tariffs on Chinese technology. This political development caused a sharp shift in risk appetite, leading to widespread panic selling. The downturn was exacerbated by the automatic liquidation of leveraged positions, creating a downward spiral of selling pressure and margin calls.
For Hodl, the impact was mixed. The Delta and Market Neutral strategies capitalized on the elevated volatility and generated a positive retuyrn. Directional funds saw only limited losses thanks to active risk management and timely rebalancing. While the market has shown a modest recovery since, confidence remains fragile. Many investors were caught off guard by the speed and intensity of the correction and are now awaiting clearer direction and greater stability.
US seizes 15 billion in Bitcoin
The US government has seized over 15 billion dollars’ worth of Bitcoin linked to an international fraud investigation. The assets were held in unhosted wallets, making this the largest digital asset seizure ever conducted by the Department of Justice. The action illustrates how governments are increasingly capable of enforcing law within the crypto space.
The timing is notable, as the US government has recently indicated it wants to establish a Bitcoin reserve without making new open-market purchases. This seizure effectively boosts those holdings without additional buying pressure.
Bhutan anchors identity registration on the blockchain
Bhutan is migrating its national digital identity platform to the Ethereum blockchain, becoming the first country to use public blockchain technology for national-level identity verification. The system allows individuals to cryptographically prove attributes such as age or nationality without a central intermediary.
With a population of roughly 800,000 and full migration planned for 2026, Bhutan demonstrates how blockchain can deliver real utility in government infrastructure. Its relatively small scale makes it a practical pilot, though it remains to be seen whether larger nations will follow its lead.
BlackRock commits to tokenization, Ark Invest confirms trend
BlackRock CEO Larry Fink announced that the firm intends to play a larger role in the tokenization of financial markets. He sees digitalization and tokenization as essential tools for improving access and efficiency in global finance. “I believe we’ll be making exciting announcements in the coming years about how BlackRock will play a bigger role in the tokenization,” Fink stated.
BlackRock is already experimenting with tokenized money market funds and digital versions of traditional assets. This week, Ark Invest reinforced that trend by investing in Securitize, a specialist in tokenizing assets that previously collaborated with BlackRock on the launch of its blockchain-based BUIDL fund.
In other digital assets news
- Paxos accidentally minted $300 trillion in PYUSD (PayPal’s stablecoin), then promptly burned the tokens to restore balance in supply.
- The Bank of England stresses that its proposed caps on stablecoin holdings are only temporary and will be lifted once risks are under control.
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