Original title: Why Did Crypto Sentiment Get So Bearish? Original author: Jack Inabinet, Bankless Compiled by: Peggy, BlockBeats Editor's Note: Just four days after Bitcoin hit a record high, the crypto market experienced an unprecedented "10/10 flash crash," with major cryptocurrencies plummeting, numerous altcoins going to zero, and exchanges facing liquidation crises. Simultaneously, highly leveraged funds like Stream Finance collapsed, revealing the fragile nature of "trust me and you're good to go" bubbles. Optimism on social media quickly turned into panic, severely damaging market confidence. This article reviews the ins and outs of this series of events, attempting to answer a key question: Why has the sentiment in the crypto market suddenly become so pessimistic? In the current context of a bursting bubble and a crisis of trust, we may be standing at a new turning point in the cycle. The following is the original text: On Monday, October 6, 2025, Bitcoin hit a new record high, breaking the $126,000 mark for the first time. Whether in the trenches of Crypto Twitter or in the newsroom of CNBC, holders were immersed in an omnipresent "fog of hope". Although the fundamentals did not change much in the month that followed, just four days later on October 10, the crypto market was hit by a crisis – the “10/10 flash crash” is now considered the largest liquidation event in crypto history. In this catastrophic crash, major cryptocurrencies plummeted by more than double digits, many altcoins went to zero, and several exchanges were on the verge of bankruptcy (almost all major perpetual contract platforms triggered automatic liquidation mechanisms because they were unable to pay short positions). Despite the fact that Trump's election was seen as a boon to the crypto industry—from establishing a strategic Bitcoin reserve to appointing regulators who appeared to be pro-crypto—the price of crypto assets has remained sluggish. Aside from a brief surge following Trump's election last November, the ratio of the total market capitalization of cryptocurrencies to the S&P 500 has remained relatively stable for nearly a year. In fact, since Trump's inauguration on January 20, this ratio has even experienced a surprising negative growth. As the market continues to digest the aftermath of the 10/10 liquidation, more and more questions are beginning to surface. Just this Monday, Stream Finance declared bankruptcy. This was a "trust me" crypto income fund managing $200 million, relying on leverage to provide depositors with above-market returns. Its "external fund manager" lost approximately $93 million in assets during operations. While details have not yet been disclosed, Stream is likely the first "Delta-neutral" strategy fund to publicly collapse due to its 10/10 automatic liquidation mechanism. Although its structure had already raised questions, this collapse still caught many lenders off guard—they chose to sacrifice safety for higher returns without clear risk signals. After Stream collapsed, panic quickly spread throughout the DeFi ecosystem, and investors began to collectively withdraw from similar high-risk, high-return strategies. Although the ripple effects of Stream have not yet fully spread, this incident has exposed the risks of the increasingly popular "cyclic stablecoin mining" strategy in DeFi—that is, using existing high-risk deposit certificates to leverage and obtain higher returns. Stream's self-reported losses also reveal the potentially huge losses that Delta-neutral funds may have encountered during the 10/10 automatic position reduction: short hedging was forcibly canceled by the system, and spot long positions instantly went to zero. Although the headlines have shifted, it is certain that the losses on October 10th were catastrophic. Whether operating openly through DeFi or covertly through CeFi, crypto yield funds involve billions of dollars in leverage. Whether the market has sufficient liquidity to cope with potential future liquidations remains to be seen. It's unclear who's "swimming naked," but it's certain that some in the crypto casinos are already out of the loop. If the market falls again, especially after lawsuits alleging centralized exchanges were insolvent during the 10/10 liquidation period, the question won't be "whether something will happen," but rather "whether the entire industry can withstand it."Original title: Why Did Crypto Sentiment Get So Bearish? Original author: Jack Inabinet, Bankless Compiled by: Peggy, BlockBeats Editor's Note: Just four days after Bitcoin hit a record high, the crypto market experienced an unprecedented "10/10 flash crash," with major cryptocurrencies plummeting, numerous altcoins going to zero, and exchanges facing liquidation crises. Simultaneously, highly leveraged funds like Stream Finance collapsed, revealing the fragile nature of "trust me and you're good to go" bubbles. Optimism on social media quickly turned into panic, severely damaging market confidence. This article reviews the ins and outs of this series of events, attempting to answer a key question: Why has the sentiment in the crypto market suddenly become so pessimistic? In the current context of a bursting bubble and a crisis of trust, we may be standing at a new turning point in the cycle. The following is the original text: On Monday, October 6, 2025, Bitcoin hit a new record high, breaking the $126,000 mark for the first time. Whether in the trenches of Crypto Twitter or in the newsroom of CNBC, holders were immersed in an omnipresent "fog of hope". Although the fundamentals did not change much in the month that followed, just four days later on October 10, the crypto market was hit by a crisis – the “10/10 flash crash” is now considered the largest liquidation event in crypto history. In this catastrophic crash, major cryptocurrencies plummeted by more than double digits, many altcoins went to zero, and several exchanges were on the verge of bankruptcy (almost all major perpetual contract platforms triggered automatic liquidation mechanisms because they were unable to pay short positions). Despite the fact that Trump's election was seen as a boon to the crypto industry—from establishing a strategic Bitcoin reserve to appointing regulators who appeared to be pro-crypto—the price of crypto assets has remained sluggish. Aside from a brief surge following Trump's election last November, the ratio of the total market capitalization of cryptocurrencies to the S&P 500 has remained relatively stable for nearly a year. In fact, since Trump's inauguration on January 20, this ratio has even experienced a surprising negative growth. As the market continues to digest the aftermath of the 10/10 liquidation, more and more questions are beginning to surface. Just this Monday, Stream Finance declared bankruptcy. This was a "trust me" crypto income fund managing $200 million, relying on leverage to provide depositors with above-market returns. Its "external fund manager" lost approximately $93 million in assets during operations. While details have not yet been disclosed, Stream is likely the first "Delta-neutral" strategy fund to publicly collapse due to its 10/10 automatic liquidation mechanism. Although its structure had already raised questions, this collapse still caught many lenders off guard—they chose to sacrifice safety for higher returns without clear risk signals. After Stream collapsed, panic quickly spread throughout the DeFi ecosystem, and investors began to collectively withdraw from similar high-risk, high-return strategies. Although the ripple effects of Stream have not yet fully spread, this incident has exposed the risks of the increasingly popular "cyclic stablecoin mining" strategy in DeFi—that is, using existing high-risk deposit certificates to leverage and obtain higher returns. Stream's self-reported losses also reveal the potentially huge losses that Delta-neutral funds may have encountered during the 10/10 automatic position reduction: short hedging was forcibly canceled by the system, and spot long positions instantly went to zero. Although the headlines have shifted, it is certain that the losses on October 10th were catastrophic. Whether operating openly through DeFi or covertly through CeFi, crypto yield funds involve billions of dollars in leverage. Whether the market has sufficient liquidity to cope with potential future liquidations remains to be seen. It's unclear who's "swimming naked," but it's certain that some in the crypto casinos are already out of the loop. If the market falls again, especially after lawsuits alleging centralized exchanges were insolvent during the 10/10 liquidation period, the question won't be "whether something will happen," but rather "whether the entire industry can withstand it."