$1.4 Billion Worth of Bitcoin Liquidated in a Recent Two-Day Bitcoin Plunge
Bitcoin and other digital coins saw a two-day decline on Monday, wiping $170 billion from the entire cryptocurrency market. According to Coinmarketcap, its market cap was $1.1 trillion the day before and currently stands at $954.53 billion.
The cryptocurrency sell-off occurred after a significant rally signaling investors profit cash out. Bitcoin is still up more than 340% in the past 12 months, hitting a record high of under $42,000 last week.
Crypto Exchanges Report High Liquidation Volumes
The largest cryptocurrency is currently priced at around $ 35,000, an 18% drop from Sunday. It was the biggest two-day drop since May last year. Ether is down about 15% to $1,126.72.
Bitcoin, Ethereum, XRP, and other coins have had more than $ 2.4 billion liquidated on derivatives exchanges, according to Bybt. Binance had an enormous liquidation volume ($903.31 million), followed by Huobi ($523.53 million) and Bybit ($494.55 million).
While BitMEX only reported liquidated long-term contracts worth $132.11 million, its traders reported the largest one-time loss of a whopping $ 10 million.
However, the long-term upside regarding bitcoin remains. Last week, social capital Chamath Palihapitiya said bitcoin could exceed $100,000.
Palihapitiya said on CNBC’s midterm report that the price of BTC will likely be $100,000, then $150,000, and then $200,000. He did not state a specific time; however, maybe some five or ten years if it is there.
Bitcoin has shrugged off after its recent downturn and could do so again, potentially bouncing down to $44,000 before its actual correction.
Institutional Investment Did Good For Bitcoin
The rise of Bitcoin can be attributed to several factors, including more investments from large institutional investors. Big financial companies like PayPal and Fidelity have made moves into cryptocurrency, while Square and MicroStrategy used their balance sheets to buy bitcoins.
In a recent research report, JPMorgan said Bitcoin could reach $146,000 in the long run as it competes with gold as an alternative currency. Bitcoin is seen as digital gold, a potential asset, and an inflation hedge. However, investment bank strategists note that Bitcoin must be significantly volatile to reach that price as it is known for its wild price fluctuations.
Bitcoin critics – such as David Rosenberg, an economist, and strategist at Rosenberg Research – call Bitcoin a bubble.
In a release, Howard Wang, co-founder of Convoy Investments LLC, said that Bitcoin is almost certainly in another bubble, and its current growth rate is unsustainable. Although it could mature in the future, Bitcoin, as it exists, is mostly a speculative asset.