$500 Million Crypto Liquidated In One Hour — What Happened?
The crypto market’s high volatility means liquidations are a common occurrence; liquidation happens when a trader has insufficient funds to keep a leveraged trade open. Bitcoin and other cryptocurrencies are renowned for being high-risk investments prone to extreme price swings.
However, while this volatility makes them a concern for regulators, it also presents an opportunity for investors to generate significant profits, particularly when compared to traditional asset classes like stocks and commodities.
Over 2020, amid the coronavirus outbreak, Bitcoin ended the year up 160% versus the S&P 500 at 14% and gold up 22%.
What Happened With Crypto This Time?
According to CoinMarketCap, the kings of crypto, Bitcoin and Ethereum, came swooshing down to below $60,000 and $4,000 respectively as over $500 million of crypto was unimaginably liquidated in just 1 hour.
The exchange was noticed by Bybt service and soon it was all over the internet. The shocking news took everyone by surprise and the news spread like wildfire across the internet.
Wu Blockchain explained on Twitter how this fall may have been affected by the fall in stock markets in Asia as well as in the US.
Bitcoin has shown a large decline for the first time since October 15 and traders are nail-bitingly worried that the price will go further low before stabilizing once again.
When Ethreum plummeted below $4,000, it pulled all other altcoins down with it.
How Was $500 Million Crypto Liquidated So Quickly?
When Bitcoin went below $60,000 and took Ethereum below $4,000 with it, ETH recovered back while people are still anxious if Bitcoin is going to fall further before becoming stable again.
According to the data shared by Bybt, in the hour just after the price drops, approximately $517.02 million worth of crypto positions, were liquidated in longs on Bitcoin, Houbi, FTX, Bitfinex, Bitmex, and other trading digital platforms.
Bitcoin lost up to $2,000 in just minutes and the levels of Bitcoin dropped fiercely from top levels in more than half a year.
Bitcoin’s long-term traders seem to be withdrawing their investments and profits after the drop. BTC had recently reached an all-time high on October 20 and this is when mass investors invested to gain profits but the sudden drop has sent a shockwave all across the world of digital currency.
Many investors are heartbroken as Bitcoin’s price keeps dipping and there is no guarantee of if or when Bitcoin will stabilize once more. Suffering huge losses, Bitcoin might not have that many fans remaining even if it comes to rise again as this drop shows the extreme volatility and instability of the currency.