The recent downturn in the market has impacted cryptocurrencies severely, with some experiencing 99% losses. This crash has particularly affected the wallets of Satoshi Nakamoto, the creator of Bitcoin, resulting in an unrealized loss exceeding $20 billion since the all-time peak price of approximately $126,000 achieved earlier in October.

As per data from Arkham Intelligence, Nakamoto holds over 1 million BTC, valued at over $117.5 billion at the current moment. The portfolio previously surged past $136 billion during Bitcoin’s ascension to record highs in early October.

Satoshi Nakamoto’s portfolio. Source: Arkham Intelligence

However, the cryptocurrency markets were disrupted by significant liquidations in the perpetual futures market on October 8, triggered by a social media post from US President Donald Trump hinting at additional tariffs on China, generating worries of a renewed trade conflict. The market crisis resulted in $20 billion worth of liquidations, marking the most significant 24-hour liquidation event documented in cryptocurrency history, causing some altcoins to plummet by over 99%. Nonetheless, Bitcoin displayed resilience by maintaining prices above the $100,000 threshold.

Market crash is a temporary setback, not a reevaluation of fundamentals

The recent market decline initiated on October 8 has been described by analysts at The Kobeissi Letter as a short-term downturn that will not have lasting fundamental consequences. They outlined various technical elements that led to the market collapse, including overwhelming leverage and low market liquidity, which increase volatility and amplify the impact of rapid, large price movements, coupled with Trump’s tweets.

Bitcoin’s price action at the time of writing. Source: TradingView

“We believe a trade agreement will be reached, and the crypto market remains robust. We maintain a bullish outlook,” the analysts remarked.

Previously, they observed that Bitcoin’s peak coincided with the US dollar’s weakest year since 1973, indicative of a significant macroeconomic transition. Moreover, it’s noteworthy that risk-on asset prices are rising alongside store-of-value assets like gold and Bitcoin, a rare scenario since these asset classes typically behave oppositely, further substantiating the analysis of Kobeissi Letter regarding macroeconomic trends.

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