BlockBeats news: On January 8, according to a report by CoinDesk, the cryptocurrency trading platform BitMEX noted in its latest report that the "1011" crash impacted market makers, forcing them to hold large amounts of cryptocurrencies. This crash led to approximately $20 billion in cascading liquidations, severely damaging market makers' market-neutral strategies and reducing market liquidity to its lowest level since 2022.
BitMEX stated, "When the ADL (Auto Deleveraging) mechanism is triggered and forcibly liquidates short positions used by market makers for hedging, these institutions are forced to hold unhedged spot positions during rapid market declines. This situation breaks the promise of the 'neutral strategy' of perpetual contracts, leading market makers to withdraw liquidity globally in the fourth quarter of 2025, which has driven order book liquidity to its lowest level since 2022."
As a large number of imitators entered the market, the "easy returns" from Delta-neutral arbitrage relying on funding rate mechanisms significantly shrank, with annualized returns dropping below 4%. Meanwhile, platforms using the B-book model captured substantial profits. The DeFi perpetual contract market remains vulnerable to manipulation, while the traditional finance perpetual contract market has experienced explosive growth.