(Kitco News) Bitcoin entered a period of heightened volatility after setting all-time highs in October as leveraged positions unwound across the digital asset market. Speaking to Kitco News in November, Mark Moss, host of the Mark Moss Show and Chief Visionary Officer at Matador Technologies, said the turbulence highlighted stress in market plumbing at a time when policymakers are “flying blind.”
The Bureau of Labor Statistics has confirmed it will not release an October CPI report due to data collection failures during the government shutdown. This leaves the Federal Reserve without a key inflation reading even as traders position for a rate cut.
Mechanical Forces Drove the Bitcoin Flush
Moss pointed to what he described as an unusually large options expiration leading into the decline. He believes this amplified mechanical volatility rather than reflecting a fundamental breakdown in Bitcoin.
“It created the largest liquidation event ever recorded. About $20 billion in leverage positions were completely wiped out in less than 24 hours,” Moss said. “It was like this anomaly. It was the plumbing.”
He calls it a glitch. “I do not know if that is the right word for it. It is just the way the system is built.”
Market Maker Stress and ADL Cascades Deepened the Selloff
Moss said he believes several market makers faced severe stress during the unwind, pointing to names discussed in industry circles such as Wintermute and Stream Finance. He added that automatic deleveraging mechanisms intensified the decline by liquidating positions without discretion. “It closes positions indiscriminately, and it is taking the profitable trades and sort of socializing the losses,” he said.
He also cited trading patterns he observed at the time. “It looks like every single morning at 9:30 AM Eastern, a big seller is coming to the market and dumping Bitcoin into the market,” Moss said. “Somebody is trying to unwind a position. Healthy markets would not do that.”
Despite the pressure, he argued that demand remained strong. “The market is absorbing that and scooping that up like a boss,” he said.
Fed Sets Policy in the Dark as Synthetic CPI Models Activate
With the October CPI cancelled, Moss noted reports that the roughly $7 trillion inflation derivatives market had to activate fallback formulas to generate synthetic inflation estimates. These mechanisms were designed for short disruptions, not full-month failures, and Moss said traders were unsure how they would behave under stress.
“Who cares if it is 2.2 or 2.3,” Moss said. “Really, it is the other side that is the liquidity. That is really what matters.” He added that the long government shutdown temporarily reduced fiscal spending, creating a liquidity pocket that was beginning to reverse.
UAE and China Complete First mBridge Payment Outside SWIFT
Another development in the weeks prior was the UAE’s confirmation that a live central bank digital currency payment to China had been executed over the mBridge network. The transaction bypassed SWIFT and settled directly on a multi-CBDC platform.
Moss said the development underscored growing fragmentation in global finance. “If they stop recycling dollars into US Treasuries, who funds the US deficit?” he asked.
He added that while the geopolitical implications are serious, the trend strengthens the long-term case for hard assets. “Gold is gonna go higher, Bitcoin is gonna go higher, our assets are gonna go higher.”
Strategy Inc. Panic Misreads the Balance Sheet
Strategy Inc.’s preferred stock traded sharply lower during the period, prompting renewed debate about its leverage. Moss rejected concerns about forced selling.
“What (Michael) Saylor is really doing is pioneering something completely new,” he said, referring to the company’s Bitcoin-backed structured finance instruments, adding that with the current price, Strategy has “somewhere about 77 years of capital to cover the coupon.”
Global Liquidity Cycle Turns Upward in 2025
Moss said several macro catalysts point to liquidity returning to global markets. He referenced expectations that the Federal Reserve will eventually shift toward easier policy once data normalizes. Japan has approved a stimulus package of about $135 billion, and Moss noted that China has already been injecting additional support into its economy.
“We are in this situation where the major central banks of the world are all basically in the same place now,” Moss said. With federal spending set to resume after the shutdown, he described the outlook as constructive for risk assets. “I expect the rest of the year [and] next year to be game on.”
Positioning for Volatility
Moss urged investors to take a long-term approach. Quoting Warren Buffett, he said: “Do not buy anything that you would not be okay holding for at least 10 years.” While he continues accumulating Bitcoin personally, Moss said his fund uses hedging strategies around higher volatility sectors such as AI.
He expects any major shock to be met quickly with intervention, speculating that any type of liquidity crisis in a broad general market sell-off event would be “swiftly dealt with by the Fed.”
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