In a shocking turn of events, an unnamed individual trader or trading entity on the cryptocurrency exchange Binance lost a whopping $55 million on a single ether deal against Binance USD (BUSD). According to information available, this big loss occurred unexpectedly as the cryptocurrency markets saw a dramatic collapse late on Thursday.
The trade in question was liquidated when the price of ether (ETH) reached $1,434 and involved a sizeable 38,986.528 ETH. Surprisingly, this trade represented almost 30% of all futures that were liquidated on Binance, emphasizing the size of the loss experienced.
Given the size of the loss, it may be the responsibility of a huge ether holder or a large trading company, both of which were clearly adversely affected by the abrupt market fall.
Within a couple of minutes, the value of ethereum fell from $1,780 to as low as $1,560, while trading volume on different cryptocurrency exchanges increased sharply from $6 billion to over $20 billion. The digital asset eventually recovered some of its losses, especially in the wake of late-breaking news that U.S. securities regulators were considering approving ether (ETH) futures Exchange-Traded Funds (ETFs) for domestic trading. ETH was down 6% over the previous 24 hours, trading at just over $1,690 as of Friday evening Asian time.
The sudden drop in the price of ether coincided with one of the biggest futures liquidation events seen in more than a year, outstripping the impact of the previous collapse of the FTX cryptocurrency exchange on the market. Data reveals that highly leveraged long positions, or wagers on rising cryptocurrency values, were quickly unwound, creating a long squeeze situation that was eerily similar to what is seen in textbooks. Unconfirmed claims that SpaceX, a well-known business connected to Elon Musk, planned to liquidate its bitcoin holdings led to these occurrences. It’s important to remember that SpaceX mainly adjusted the book value of its bitcoin assets, which was misread by some market segments and led to more selling pressure.
As demonstrated by the recent substantial loss suffered by the anonymous trader or business, the cryptocurrency market’s intrinsic volatility and vulnerability to abrupt fluctuations highlight the necessity for care and strategic risk management in the trading of digital assets.
