In the fast-paced world of cryptocurrency, market dips can feel like rollercoaster drops, but a recent tweet from investor Kyle (@0xkyle__) at Defiance Capital has folks buzzing. He points out that if we buy into the idea that recent liquidations are underreported—with consensus hovering around $40 billion—this shakeup could be 25% to 50% the size of the infamous FTX collapse. It's a reminder that while the crypto industry is maturing, these events can still mark the end of a cycle, especially for altcoins.

Kyle's tweet reads: "If you were to believe that the amount liquidated is under reported (consensus seems to be 40b) Then this would put it at 25%-50% the scale of the FTX Collapse. This lines up with the whole 'industry is growing' - no more existential events, but still a cycle ending event for alts."

To drive the point home, he shared this summary of the FTX fallout from 2022:

As the image highlights, the FTX debacle erased over $180 billion from the crypto space in its immediate aftermath. In just three days, major coins lost $152 billion in market value, with broader effects wiping out $183 billion in November 2022 alone. FTX itself had an $8-9 billion hole in customer funds, per sources like Wikipedia and CNBC, plummeting from a $32 billion valuation to bankruptcy in a week. Cascading effects hit Bitcoin (down 16%), Ethereum, Tether (briefly depegged to $0.97), and others like Cronos, which shed about $1 billion.

Understanding the Recent October 2025 Crypto Crash

Fast forward to October 2025, and the market faced another brutal test. Starting around October 10, a massive selloff led to what some call the largest single-day liquidation event ever, with reports of $19 billion in leveraged positions wiped out, according to analytics from CoinGlass and coverage by Reuters. But Kyle suggests the numbers might be lowballed, with whispers of $40 billion circulating.

This turmoil was sparked by geopolitical jabs, like U.S. President Donald Trump renewing tariff threats on China, as detailed in CNN's report. Bitcoin dipped below $110,000 briefly Investopedia, Ethereum and altcoins followed suit, and the overall market shed around $150 billion Bloomberg. Over 1.6 million traders saw positions liquidated, per The Kobeissi Letter.

Liquidation, for those new to the game, happens when traders using borrowed money (leverage) can't cover losses as prices fall, forcing exchanges to sell their holdings automatically. This creates a snowball effect, amplifying the downturn.

Why This Matters for Altcoins and Meme Tokens

Kyle's take resonates because it frames this as not an "existential" crisis like FTX—which nearly broke the industry—but a sign of growth. The crypto space is bigger now, with better safeguards, yet these purges can reset cycles, hitting altcoins hardest. Altcoins are any cryptocurrencies beyond Bitcoin, including meme tokens like Dogecoin or emerging ones built on fun, community-driven narratives.

Meme tokens, often volatile and hype-fueled, thrive in bull runs but get hammered in corrections. In this October dip, many saw double-digit drops, echoing FTX's altcoin slaughter. It's a cycle-ender: weak projects fade, strong ones consolidate. For blockchain practitioners, this is a chance to study resilience—look at how protocols like Ethereum weathered the storm versus fringe memes.

Lessons from FTX and the Path Forward

Comparing scales, if the 2025 event's true impact nears $40-80 billion (25-50% of FTX's $180 billion wipeout), it's significant but not apocalyptic. Post-FTX, regulations tightened, exchanges like Binance and Coinbase bolstered transparency, and DeFi (decentralized finance) grew as a safer alternative.

For meme token hunters, diversify: mix in blue-chips like Bitcoin, stake in solid projects, and use tools like on-chain analytics to spot underreported trends. The industry's evolution means fewer black swans, but cycles persist—buy the dip wisely.

As Kyle implies, crypto's maturing: bigger pie, smaller relative bites. Stay informed, and remember, in blockchain, knowledge is your best hedge.