Daily Crypto Deep Dive: Who Made the Money From the $390B Crypto Reset?

**SPEAKER_1** (0:00)
Welcome back to the Daily Crypto Deep Dive. Today, we are asking one of the most important questions in crypto, and it is the question most people do not ask when the market is falling. When Bitcoin crashes, Ethereum gets hammered, altcoins bleed, and hundreds of billions of dollars are wiped from the market. Who actually makes the money?
Because that is the uncomfortable truth about every reset. The money does not simply vanish into thin air. Some of it is destroyed through falling valuations, yes, but a lot of it changes hands. One trader gets liquidated. Another trader gets paid. One investor panics sells. Another investor buys lower. One retail holder watches their portfolio drop. An exchange collects fees. A market maker captures spread. A short seller closes in profit. A stablecoin holder gains buying power. So, after this latest crypto reset, where Bitcoin dropped toward the $60,000 level, Ethereum suffered a brutal weekly fall, and the wider crypto market saw roughly $390 billion in value wiped away.
The real story is not just the crash. The real story is the transfer.
This was not just a red week. It was a major transfer of money from over-leveraged traders, weak hands, late buyers and emotional sellers into the hands of short sellers, exchanges, market makers, stable coin holders, institutions with cash, and anyone who was patient enough to wait for forced selling. Before we get into it, if you are buying crypto during these resets, trading the market, or just building your long-term position, check out Kraken using the link in the description. You can buy Bitcoin, XRP, Solana, and other major crypto assets, and using our link helps support the show. Now let's start with the first group that made money. The short sellers. This is the easiest one to understand. If one side of the market is heavily betting that prices will rise, and prices collapse instead, the opposite side gets paid. Across this reset, nearly 7 billion dollars in leveraged positions were liquidated, and the majority of that came from long positions. That means traders were borrowing money or using leverage to bet that Bitcoin, Ethereum, Solana, and other crypto assets would go higher. When the market moved against them, those positions were automatically closed.
That is brutal if you are on the wrong side. But for the short sellers, it is a payday.
Short sellers profit when the market falls. They borrow or synthetically sell an asset, wait for it to drop, and then close the position lower.
In simple terms, the panic becomes their profit. This is why crashes often move faster than normal pullbacks. It is not just people deciding to sell. It is liquidations, stop losses, margin calls, and forced closures all firing at once. The people who were long get taken out, and the people who were short benefit from that pressure. And we have already seen examples of whales making millions during this reset. Some large traders on derivatives platforms were reportedly sitting on multi-million dollar profits from short positions. That is the difference between retail and professionals. Retail often watches the red candle and freezes. Professionals position for the move before it happens, or they react faster once the weakness starts. The second group that made money was the exchanges. This is one of the biggest things ordinary investors forget. Exchanges do not need you to win. They need you to trade. When the market is quiet, volume can dry up. When the market crashes, everybody does something. People sell, people buy the dip, people short, people hedge, people panic close positions, people get liquidated, people move from altcoins into bitcoin, people move from bitcoin into stablecoins. Every action creates fees. So while traders are losing money, exchanges are collecting money. Every forced liquidation, every futures trade, every spot sale, every stop loss, every panic market order creates activity.
And that activity is revenue. This is why extreme volatility can be fantastic for trading platforms. It brings users back. It increases volume. It creates spreads. It creates liquidation fees. It creates funding payments. It creates more derivatives activity. The emotional trader experiences it as chaos. The exchange experiences it as business. That does not mean exchanges cause the crash. But structurally, they are one of the biggest beneficiaries of volatility. The third group that benefits is market makers. Market makers sit in the middle of the market. They provide buy and sell quotes. They create liquidity. They help match buyers and sellers. In normal conditions, the spread between buying and selling can be tight. But during panic, liquidity becomes thinner, spreads can widen, and forced sellers are often willing to accept worse prices just to get out.
That creates opportunity.
When retail hits a market sell button during a crash, someone is taking the other side of that trade. When a leverage long gets liquidated, someone is buying that forced sell.