What is a crisis in the context of the November 2025 cryptocurrency crash: Learning from the FTX 2022 collapse

The Core Difference Between Two Market Shock Events

November 2025 marks a significant period of turmoil in the cryptocurrency market, as total market capitalization dropped from $4.2 trillion to $3 trillion within a few weeks. However, to understand what a crisis is in this context, we need to distinguish between short-term market shocks and systemic, destructive crises.

The 2022 event related to FTX was characterized by institutional loss of confidence, leading to chain bankruptcies and mass asset freezes. In contrast, the 2025 sell-off mainly reflected price pressure caused by macroeconomic factors and leverage liquidations, but the market structure remained operational. This difference is crucial to understanding why one event did not lead to a comprehensive collapse like the other.

Magnitude of Price Decline: A Comparative Unit

In 2025, Bitcoin lost about 30% of its value, dropping from a peak to below $90,000 ( currently at $90.21K). Ethereum experienced a deeper loss, exceeding 40% during the same period. As of now, Bitcoin has a market value of $1.8 trillion, while Ethereum stands at $370 billion.

To put this into perspective, the 2022 wave devastated much more: Bitcoin plummeted to $15,500 ( losing over 70% from its 2021 peak), Ethereum fell below $900. This collapse was widespread and triggered domino effects throughout the entire crypto financial ecosystem.

Record Liquidations but No Systemic Collapse

Most notably, although liquidations in 2025 reached record values ( with more than $19 billion in positions wiped out over several days), they did not trigger chain reactions like in 2022.

The reason lies in infrastructure improvements. Trading platforms enhanced liquidity, faster order execution mechanisms, and large organizations implemented stricter risk management measures. Instead of complete bankruptcy, many investment funds chose to adjust their positions or cut losses in a controlled manner. Capital continued flowing into ETF products, indicating that a layer of long-term investors still maintained confidence.

Impact on Publicly Listed Companies: A Clear Difference

The 2022 wave saw a wave of bankruptcies stemming from the collapse of a central organization. In 2025, although some publicly traded companies faced pressure to reduce market capitalization, there was no similar chain of bankruptcies. This reflects the different nature of “what constitutes a crisis” in the two cases: one is an internal governance and trust issue, the other is purely market volatility.

Investor Psychology: From Fear to Calculated Caution

After lessons from 2022, investors have become more sensitive to risks. When volatility surfaced in November 2025, the reaction was not to run away entirely but to withdraw funds in an orderly manner. Institutional liquidity remained stable, allowing fund managers to adjust positions without triggering mass panic selling. Some long-term investors even accumulated more during the market downturn, demonstrating more deliberate choices rather than emotional reactions.

The Role of Regulation in Mitigating Systemic Risks

Post-2022, global regulators tightened oversight. 2025 shows the effectiveness of these measures:

• Requiring greater transparency in financial reporting to reduce risks for retail investors
• Improving customer asset protection procedures to prevent mass asset freezes
• Stricter control over leveraged products to reduce systemic risk

Macroeconomic Context and Outlook to 2026

Global interest rates, inflation pressures, and monetary policies remain dominant factors. However, the disillusionment of institutional investors with digital assets is gradually maturing, creating more stable capital flows.

The outlook for late 2025 and 2026: the market may experience further deep corrections but also has opportunities for recovery as institutional capital stabilizes. New financial products with robust risk management will attract more cautious investors.

Risk Management Principles for Investors

To avoid painful lessons from both events, investors should:

• Diversify not only across asset classes but also across storage channels; avoid over-concentration in a single intermediary
• Control leverage: highly leveraged positions amplify losses during market volatility
• Prioritize platforms with transparent asset protection processes and strong risk management
• Develop phased buying strategies during corrections rather than reacting emotionally

Conclusion: Understanding to Better Respond

Understanding what constitutes a crisis in each specific context is key for investors and financial organizations to respond effectively. The price decline in November 2025 was a turbulent wave but not a systemic collapse like in 2022. Infrastructure improvements, better risk management, and tighter legal frameworks have helped limit damages. However, macroeconomic factors still pose significant risks, requiring investors to maintain disciplined risk management, transparency, and preparedness for future waves.