Crypto markets retreat, but don’t call it a collapse: MEXC’s Cecilia Hsueh

The current market downturn has no structural parallels to the 2022 Luna, FTX collapse, says MEXC’s Cecilia Hsueh.

From stock markets to crypto exchanges, global risk assets are facing their most volatile quarter of the year. Geopolitical tensions and central bank policy contributed to a fragile investor confidence. For crypto assets, this is a challenging environment.

With Bitcoin (BTC) recently dipping below $90,000, investors are concerned about a potential further pullback. Crypto.news discussed these concerns with Cecilia Hsueh, the CSO of MEXC, at the Crypto Content Creator Campus in Lisbon, Portugal.

Crypto.news: So there’s been a sharp pullback across the crypto markets. What is your read on the market situation right now?

Cecilia Hsueh: Yes, we are definitely seeing a sharp pullback in the market at the moment. But I think it’s more of a correction rather than a full collapse. The market is still being affected by what happened on October 10th or 11th, depending on your time zone.

There was a lot of disruption — many market makers and large whales were liquidated. I believe around $2 billion in positions were wiped out in just one day, making it one of the most significant liquidation events in crypto history.

So yes, the effects are still playing out, but from what we can see, it’s not a systemic collapse. From our vantage point at MEXC, we’re seeing very healthy inflows and outflows from retail users. People are still trading actively.

However, some institutions are clearly taking a step back. I’d say it’s more of a “calm down” period. They’re waiting to see what’s going to happen with the broader macroeconomic picture, which remains unclear. So many would rather pull back temporarily and reassess whether it’s time to accumulate more tokens or withdraw altogether.

CN: You mentioned the October 10th flash crash. At the time, liquidity issues affected major exchanges, such as Binance. Since then, have exchanges made any architectural changes to avoid similar disruptions?

Hsueh: That crash mainly happened on a single exchange. It wasn’t a cascading event across platforms. I’m not a spokesperson for that exchange, so I can’t say whether they’ve made changes.

What I can say is that at MEXC, we didn’t experience any outages or downtime on that day. Our technical infrastructure remained very stable — our matching engine, security systems, everything functioned normally. We ensured user assets were safe throughout. That was true for the October 10th event and for the more recent crash last week as well.

CN: You mentioned institutions taking a “wait and see” approach. What’s your read on the broader institutional sentiment? Are some seeing this as a buying opportunity, or are they reevaluating the risks of crypto?

Hsueh: Institutional behavior is quite diverse right now. Some institutions are still very active. For example, MicroStrategy — Michael Saylor just posted that they’ve been buying Bitcoin every day this past week. They remain very bullish and see the current prices as a good opportunity to accumulate.

On the other hand, crypto venture capital firms are pulling back. From the conversations I’ve had, many are pausing investments right now. Many tokens from newly launched projects are down 50% or more, making the environment risky for VCs.

Unlike other institutions, crypto VCs don’t have the power to influence token prices post-investment. They’re simply allocating funds and hoping for appreciation. Given current market conditions, they’re being more cautious.

As for TradFi institutions, they’re also mostly waiting. A lot hinges on macroeconomic indicators, and until there’s more clarity, they’re choosing to observe rather than act.

CN: There’s a big difference in how major assets like Bitcoin and Ethereum react compared to smaller altcoins. Even though Bitcoin dropped 20% in a few days, what signs show that this is different from the 2020 crash?

Hsueh: It’s definitely different. At the end of the last cycle, we saw disasters like Luna’s collapse, stablecoins losing their pegs, and the FTX implosion — all of which caused massive liquidity crunches.

In contrast, today’s correction isn’t driven by structural failures. It’s more about uncertainty around macroeconomic conditions. Liquidity remains healthy, and we’re not seeing withdrawal freezes or platform failures like in 2022.

This is more of a sentiment-driven correction than a fundamental one.

CN: In the past year, we’ve seen increased institutional interest in Bitcoin and other major crypto assets. Some people argue that this is making Bitcoin more correlated with high-risk equities. What’s your perspective? Is Bitcoin behaving more like equity now or more like gold?

Hsueh: The trend is becoming clearer. People used to call Bitcoin “digital gold,” and in earlier years — during events like COVID or geopolitical turmoil — Bitcoin often acted as a hedge, even increasing in price when traditional financial systems were under pressure.

But now, it’s showing much stronger correlations with the stock market. That’s partly because of the Bitcoin ETF approvals and the influx of institutional capital, especially from TradFi players. So yes, it’s understandable that Bitcoin is moving more in sync with equities.

But at the same time, I don’t think it fully undermines the “digital gold” thesis. Fundamentally, Bitcoin is still very different from stocks. It’s not a company with earnings or management — it’s a decentralized protocol backed by global consensus.

The increased correlation with equities reflects a broader macro environment and the growing presence of traditional finance. Still, the long-term value of Bitcoin is driven by a belief in decentralization and the idea that it represents an alternative financial system. That’s where the demand comes from — not just price speculation, but from a vision of the future.

CN: So even if Bitcoin trades like equities at times, its long-term value isn’t necessarily threatened?

Hsueh: Exactly. I wouldn’t say it’s 100% correlated with the stock market. The core fundamentals of Bitcoin are very different from equities. It represents a broader consensus about what the future of finance could look like — decentralized, transparent, and independent of centralized control.

That’s why even though we see short-term volatility and correlation, long-term believers — especially those building in the space — continue to stay. The price will increase over time as more people buy into this vision.

If you’re building long-term in this industry, you have to believe in Bitcoin and crypto. Otherwise, there’s no point in being here.

CN: And you personally — you’re optimistic about this decentralized future?

Hsueh: Yes, otherwise I wouldn’t still be in this industry. I’ve been in crypto for six years now. At first, I didn’t believe in decentralization much. It felt more like speculation. But the deeper I got, the more I saw what people were building and why they were doing it.

Now, I really believe this is the future of finance. It may not be fully decentralized — more likely a hybrid of decentralization and centralization — but change is inevitable. The existing system will evolve.