The massive $19 billion liquidation event that shook the crypto market earlier this month demonstrated not only how volatile digital assets remain, but also how resilient the ecosystem has become, according to a new report from TD Cowen analysts.
“While cognizant that the recent episode caused intense financial hardship for many investors, what strikes us is how well the underlying ecosystem functioned,” analysts wrote on Monday. “Though it was the largest single-day liquidation ever, with open interest halved across venues, most crypto exchanges operated with little or no downtime.”
Markets Absorb Trump Tariff Shock
The crash came after President Donald Trump announced a 100% tariff on Chinese imports, triggering a sharp global selloff. The total crypto market fell more than 10% in hours, with liquidations initially hitting $10 billion before climbing to nearly $20 billion.
Despite the chaos, Bitcoin and Ethereum weathered the storm better than most assets. Bitcoin briefly dropped 15% before recovering to close down only 8%, while many smaller and less-reputable tokens were “decimated,” the analysts noted.
Bitcoin Adoption Keeps Growing
Beyond the short-term volatility, TD Cowen emphasized that Bitcoin adoption continues to accelerate globally. In Japan, the number of registered crypto accounts has reportedly quadrupled to over 7.9 million, prompting regulators to reconsider the nation’s long-standing ban on banks investing in digital assets.
“The growth has led Japan’s Financial Services Agency to reconsider the country’s prohibition on banks investing in digital assets like Bitcoin,” the note said.
Bullish Long-Term Outlook
TD Cowen analysts remain bullish on Bitcoin’s long-term trajectory, forecasting that the leading cryptocurrency could reach $141,000 by December.
They argue that despite the record-breaking liquidations and macroeconomic turbulence, the market’s ability to self-correct, with exchanges remaining operational and liquidity quickly stabilizing, underscores a maturing industry capable of withstanding major shocks.
“The recent flash crash reminded investors that volatility is far from gone,” the report concluded. “But it also proved that digital assets can take a hit, and bounce back stronger.”