Following the liquidation event on October 10, cryptocurrency markets have stabilized, with leverage levels returning to healthier ranges, according to Coinbase. The sell-off, which wiped out over-leveraged altcoin positions and thinned liquidity, is described as a structural reset that purged excess leverage rather than a cycle peak, creating cleaner conditions for recovery.
Coinbase reported that institutional investors remained largely insulated from the shock and are now leading a selective re-risking phase. Data shows capital rotation toward Ethereum and Arbitrum, while Solana and Binance Smart Chain lose market attention, reflecting renewed confidence in the EVM stack. Yield protocols and real-world asset (RWA) sectors have attracted renewed interest, with stablecoin flows indicating internal capital redistribution rather than fresh inflows.
Notably, BlackRock deployed approximately $500 million each to Polygon, Avalanche, and Aptos for tokenized RWAs, emphasizing institutional engagement in blockchain-based yield instruments. On the macro front, Coinbase observed a complex but manageable environment, with U.S. Treasury yields around 4% providing a neutral backdrop, and potential Fed rate cuts supporting risk assets.
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