KEYTAKEAWAYS
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Tom Lee says the Oct 11 crypto crash and DeFi exploits shook sentiment but remain contained, unlike past systemic collapses.
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Binance’s new PoR shows assets fully backed, but audit reliability and real-time liquidity questions keep transparency debates alive.
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CEX stablecoin reserves jump $10B as traders flee volatility, signaling rising institutional use and stablecoins’ growing dominance in crypto finance.
CONTENT
TOM LEE: 10/11 LIQUIDATION AND DEFI EXPLOITS DAMAGED MARKET SENTIMENT
On November 7, BitMine Chairman Tom Lee told CNBC that the October 11 crash was one of the largest liquidation events in crypto history. He added that subsequent DeFi incidents — including the Balancer exploit — further eroded market confidence, and it may take several weeks for investors to digest the impact. “The good news,” Lee noted, “is that the number of affected projects appears small, so this doesn’t seem to be a systemic issue.”
Looking back, the March 12, 2020 crash (“3/12”) quickly reset overleveraged positions and kicked off a new cycle, largely because the DeFi ecosystem was still nascent — inter-protocol leverage and exposure were limited. In contrast, the 2022 collapses of FTX and Three Arrows Capital had far deeper effects due to cross-chain leverage and institutional entanglement that undermined ecosystem-wide trust. Compared to those, the October 11 crash and Balancer exploit look more like localized stress events: liquidations were driven by derivatives market leverage, while the DeFi incident was technical in nature and did not meaningfully spread to core protocols or institutional balance sheets.
BINANCE RELEASES LATEST PROOF-OF-RESERVES REPORT
On November 7, Binance published its latest Proof-of-Reserves (PoR) report (as of November 1, 2025), showing all major crypto assets remain overcollateralized. According to the report, BTC reserve ratio stands at 102.11%, USDT at 107.45%, ETH at 100.00%, BNB at 112.95%, and USDC at 133.79%.
The key issue lies in the reliability of verification methods. While Merkle Tree proofs allow users to confirm inclusion of their assets in the reserve snapshot, the credibility of third-party audits depends on their independence and auditing standards. It’s important to note that PoR reports only verify asset balances at a specific moment in time — they do not account for liquidity conditions or liabilities that may change afterward.
CEX STABLECOIN RESERVES INCREASED BY NEARLY $10B OVER THE PAST MONTH
According to CryptoQuant data shared by @ali_charts on November 7, centralized exchanges (CEXs) have seen their aggregate stablecoin reserves grow by nearly $10 billion in the past month — a trend inversely correlated with the broader crypto market’s performance. Analysts interpret this as traders rotating out of volatile assets into stablecoins.
Stablecoins have evolved far beyond their original purpose as trading intermediaries — they now function as core infrastructure bridging traditional finance and crypto, akin to the “new oil” powering the digital economy. Institutional interest in stablecoin issuance, combined with their efficiency in payments, cross-border settlements, and financial inclusion, suggests that the total supply and usage of stablecoins will continue expanding in the coming quarters.
