The October 10 selloff has been one of the most confusing events of this cycle. Bitcoin dropped violently. Liquidations hit record levels. Altcoins cratered. Yet there was no obvious macro shock, no ETF rejection, no exchange failure, and no regulatory bombshell. For weeks, traders blamed leverage, sentiment, or simple exhaustion at the top of the market.
But a new breakdown from analyst Bull Theory on X offers a clearer explanation. The crash began at the exact same time MSCI quietly released a consultation note about how to classify companies holding significant digital assets. Almost nobody in crypto saw it, but traditional finance did.
MSCI proposed that any publicly traded company with 50 percent or more of its assets in Bitcoin or other digital currencies, and whose business activity resembles a digital asset treasury, may be excluded from global equity indexes. That immediately raised red flags for firms like MicroStrategy, whose balance sheet is heavily Bitcoin focused.
If MSCI follows through, large index funds would be forced to sell shares. They do not get to decide. They must mirror the index they track. The concern was simple and logical: if those funds sell MicroStrategy, and MicroStrategy reacts by selling Bitcoin or losing market confidence, BTC itself could face cascading downside pressure.
The timing made everything worse. Markets were already fragile after tariff headlines, weak tech stocks, and heavily leveraged Bitcoin long positions. Fear was building around whether the four year cycle top had already passed. When the MSCI note surfaced, it introduced a structural uncertainty nobody had priced in.
That new risk triggered panic. Liquidations accelerated. Order books thinned. Retail capitulated. What looked like a random meltdown suddenly had a catalyst.
THE REAL REASON BEHIND THE OCTOBER 10TH CRYPTO CRASH IS FINALLY OUT.
— Bull Theory (@BullTheoryio) November 23, 2025
And it’s much bigger than what people thought.
For weeks, traders kept asking the same question:
"Why did the market collapse so violently on Oct 10 when there was no macro event, no ETF news, no exchange… pic.twitter.com/fXee8WnNZu
Bull Theory also highlighted JPMorgan’s role. Just days ago, the bank published a report emphasizing the same MSCI index removal threat. That analysis landed while Bitcoin, MicroStrategy, and broader liquidity were already under pressure. Whether intentional or not, the timing amplified fear and helped push the market even lower. JPMorgan has a long history of offering bearish outlooks during downturns and turning bullish once accumulation begins, so many crypto traders viewed it as classic Wall Street positioning.
MicroStrategy CEO Michael Saylor responded publicly soon after. He rejected the narrative that the company is simply a Bitcoin holding entity and emphasized that it remains an operating software firm developing financial products. He pointed to new digital credit instruments, ongoing business revenue, and continued innovation to demonstrate that MicroStrategy is not a passive Bitcoin fund. His message aimed to separate the company from the MSCI classification risk.
Still, uncertainty remains. MSCI will announce its final decision on January 15, 2026, and any policy changes would take effect in February. Markets often price risk before it arrives, so volatility may continue until the outcome is known. Forced index selling, if it occurs, could pressure MicroStrategy shares and indirectly affect Bitcoin sentiment again.
The broader takeaway is not that Bitcoin is broken or that institutional adoption is ending. ETF flows remain structurally positive over the long term. Corporations, asset managers, and governments continue exploring Bitcoin reserves. Builders and developers are still expanding the ecosystem. The fundamentals that drove the past two years of adoption have not changed.
What changed was awareness of a new potential bottleneck between traditional finance and corporate Bitcoin ownership. The October 10 crash was not random. It was a technical panic sparked by a policy proposal that collided with a stressed market.
Bull Theory’s conclusion is that the event will be remembered as a liquidity and sentiment shock, not the beginning of a long term breakdown. Once clarity arrives and forced selling fears fade, markets may normalize, and Bitcoin’s larger structural trend can resume.
In other words, volatility came from confusion, not conviction. And in crypto, confusion never lasts forever.
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