10x Research: The crypto market may introduce a "circuit breaker" mechanism to cope with extreme volatility

According to ChainCatcher, a 10x Research report states that the recent crypto market crash has exposed deep-rooted issues in exchanges’ liquidation and risk control mechanisms, with some platforms profiting from the event while others lost hundreds of millions of dollars. The report points out that automated liquidation systems, designed to provide liquidity, actually amplified chaos during extreme market conditions, prompting institutions to re-examine their risk management frameworks.

A new focal point of industry discussion is emerging—whether crypto exchanges should draw from traditional financial markets and introduce “circuit breakers” to limit extreme volatility. 10x Research notes that if implemented, this move could permanently alter the volatility structure and profit logic of the crypto market. The report also recalls that after Musk announced in 2021 that Tesla would stop accepting bitcoin payments, the market experienced political backlash triggered by leveraged liquidations. The far-reaching impact of the current crash may similarly reshape the structure of the crypto market.