Good Morning and Happy Monday from Cumberland APAC! Crypto plunged early on Saturday (or late on Friday, depending on timezones) on warnings of China tariff escalation, and it triggered a round of liquidations across centralized and decentralized crypto. This is the very definition of Monday morning quarterbacking, but two of the major recent trends in crypto (products that generate yield from perpetual basis; and the explosion in perp DEX usage) have led to higher open interest across perps, and more and more collateral being used. It is inevitable that markets trend towards lower-quality collateral being used, which can lead to ADL waterfalls, which appears to have contributed to what happened over the weekend.

As the market opens up...