A massive short liquidation event on Bybit, involving over $10 million in Bitcoin, contributed to a record-breaking $5.01 billion global crypto market shakeup in August 2025. This significant instance underscores the volatile nature of cryptocurrency markets, impacting both Bitcoin and other assets worldwide. Bybit played a prominent role in this event, handling one of the largest single-day liquidation volumes, exceeding $219 million in total exchange volume. The surge in Bitcoin prices, which surpassed $120,000, was amplified by institutional buying pressure, leading to significant Ethereum price fluctuations too. Financial activity witnessed a notable influx into BTC-backed ETFs with $403 million in shares purchased, reflecting strong investment from institutions, particularly BlackRock’s IBIT, which saw over $359 million in inflows. This event has sparked discussions on leverage risks and the need for robust risk management strategies by traders and investors alike. Experts like Arthur Hayes of BitMEX emphasize the importance of active risk management amidst such market volatility.