Uptober Called in Sick
October has a reputation in bitcoin circles. Bitcoiners call it "Uptober," because bitcoin has closed the month higher in 10 of the last 13 years.
This year looked ready to keep the streak going. Bitcoin opened October near $84,000, fresh off a strong summer and the biggest week of bitcoin ETF inflows all year ($2.39 billion in the week ending September 25).
Then Uptober called in sick. Halfway through the month, bitcoin is sitting near $81,000, and a lot of short-term traders are having a very bad week. Here's what happened, and why it might be the best lesson of the year for anyone building wealth for their family.
What Actually Happened
Two things collided early this month: hot inflation news and a whole lot of borrowed money.
First, the borrowed money. Many traders don't just buy bitcoin. They borrow to bet bigger, which is called trading with "leverage." A trader with 10x leverage can turn a 5% move into a 50% gain. They can also turn a small dip into a total wipeout. When the price falls far enough, the exchange closes the bet automatically and keeps the trader's deposit. That's a "liquidation." This is also the exchange’s bread and butter, they love perpetual contract traders.
Now, the timeline:
October 7: Bitcoin slipped to about $84,000. Around $546 million in leveraged bets were liquidated, and 88% of them were traders betting the price would go up.
October 13: Another $771 million in forced selling.
October 15: The inflation report (CPI) came in hot at 3.7%. That raised fears the Federal Reserve might hike interest rates. Bitcoin dropped $1,500 in about 10 minutes and dipped as low as about $80,400. Close to $1 billion in bets were liquidated in 24 hours, and almost 92% of them were bets on the price going up.
Here's the part that matters: each liquidation is a forced sale. Forced sales push the price down, which triggers more liquidations, which push the price down further. It's a game of dominoes, except every domino is somebody's margin call.
A Tale of Two Bitcoiners
Let's meet two people who both owned bitcoin on Thursday morning.
Leveraged Larry has been watching bitcoin "get ready to moon" for three weeks. He put $10,000 on an exchange and borrowed enough to control $100,000 worth of bitcoin. He's planning a boat. He's already picked out a boat name. Boaty McBoatface incoming lol.
At 5:30 a.m., the inflation report drops. At 5:40, bitcoin falls about 2%. Larry's coffee is still brewing. By the time it's done, the exchange has closed his position, and his $10,000 is gone. Larry did not get the boat. Larry did not even get to finish the coffee.
Vault-Keeping Vincent bought bitcoin a little at a time over the last few years. He paid for it with his own money, moved it to cold storage, and set up a family backup plan so his kids can inherit it someday.
On Thursday, Vincent’s bitcoin dropped about 3% in value. He noticed that around lunchtime, said "huh," and went back to his barbecue brisket sandwich. Nobody can liquidate Vincent, because he doesn't owe anybody anything.
Same bitcoin. Same price drop. Two completely different Thursdays.
Happy Anniversary, I Guess?
If this feels familiar, it should. A year ago, bitcoin hit an all-time high on October 6, 2025. Four days later, the market went through one of the biggest liquidation days in crypto history, with more than $19 billion in leveraged bets wiped out. It’s still waiting for the remainder of that capital to pivot back in.
This October's flush is much smaller, around $1 billion on its worst day. But the story is the same: the market saw a crowd of overconfident borrowers and went looking for them. It’s always looking for easy marks, and leveraged traders are by far the easiest.
Bitcoin was invented in 2009. Leverage traders have been learning this lesson every year since. At this point it's less of a market event and more of a holiday tradition.
What This Means for Your Family's Bitcoin
If you're building a bitcoin reserve for your family, weeks like this one are not a warning sign. They're a reminder of why the plan works. Here are the three things I'd take away:
Own it, don't borrow it. Volatility can't take bitcoin away from someone who owns it outright. Only debt can do that. Every dollar lost this month was lost by somebody using borrowed money.
Hold your own keys. Bitcoin sitting on an exchange is an IOU from that exchange. Bitcoin on your own hardware wallet, with a solid family backup plan, belongs to you. Exchanges get stressed during wild weeks. Your hardware wallet doesn't care.
Zoom out. Generational wealth is measured in decades, not Thursdays. Bitcoin was under $500 when I discovered it in 2015. Nobody who held through the dips back then is upset about today's price.
One more thing: dips like this are when patient buyers quietly add to their stack. Larry is selling because he has to. Vincent can buy because he wants to.
Be Vincent
If this month made you wonder whether your own bitcoin is set up like Larry's or like Vincent’s, I can help. The Bitcoin Self-Custody course walks you through getting your bitcoin off exchanges and onto a hardware wallet you control. I wonder if we’ll one day be able to hold our own tokenized stocks too! If you're ready to make sure your bitcoin reaches your kids and grandkids, ask me about our family vault service.
Just reply to this email and we'll find the right next step for you.
Stay humble, stack sats, and maybe skip the boat.
Dominic - Owner of the Bitcoin Foundry
