No. of Recommendations: 4
It was largely margin calls which accelerated the stock market crash of 1929 as well as (in more convoluted manners) more recent ones. Cryptocurrency was baddly battered last Friday when stocks plunged.
Cryptocurrencies plunged in value on Friday in a short but significant flash crash, leaving investors with billions of dollars in losses and highlighting the volatility associated with the industry.
Traders were jolted after President Donald Trump threatened new tariffs on imports from China, sparking a sell-off in risky assets like tech stocks and crypto and a flight to safe havens like gold and silver, which are both trading at record highs.
From bitcoin to meme coins, cryptocurrencies sank as investors sold their holdings and highly-leveraged positions were closed amid the sharp, unexpected downturn.
The mini crash resulted in a record $19 billion in liquidated positions, according to data analysis from CoinGlass.
Although crypto prices have since rebounded, about 1.6 million traders had their positions liquidated on Friday, according to The Kobeissi Letter.
What happened?
After Trump’s tariff threat Friday, nervous investors dumped their riskier bets and fled to the perceived safety of government-issued Treasury bonds and gold. The tech-heavy Nasdaq Composite dropped 3.56% while bitcoin fell 15% at its lowest point. The S&P 500 posted its worst day since April.
Bitcoin fell from roughly $122,500 to a low of roughly $104,600 on Friday afternoon. Ethereum, the world’s second largest cryptocurrency by market value, fell roughly 21%.
“The aggressive crypto selloff was sparked by a risk-off stampede,” said Lukman Otunuga, senior market analyst at FXTM.
Highly speculative coins were hit much harder: Dogecoin dropped more than 50%, according to Coinmarketcap data. President Donald Trump’s $TRUMP coin fell roughly 63% at its lowest point.
Jeff
