About $1 billion guaranteed by some 260,000 market investors was liquidated due to margin calls in the past 24 hours, according to data from CoinGlass, the Wall Street Journal reported on Tuesday (Jan. 14).
The day trading frenzy during COVID helped take cryptocurrency to new heights in 2020, hitting record highs in November 2021. The crypto market has since lost 66% of its value, according to the report.
Bitcoin’s price was $22, 411 as of 5:45 a.m. ET on Tuesday (June 14), about two-thirds of its $67,802.30 high in November 2021, according to Dow Jones Market Data. Bitcoin’s plummet since last November has added to about $2 trillion in losses in the overall market.
See also: Crypto Nosedives Following Celsius Collapse
Crypto’s total market capitalization was roughly $975 billion on Monday (June 13) from a November high of close to $3 trillion, according to data from CoinMarketCap.
Celsius, which claims to have 1.7 million customers and $11 billion in user assets, according to its website, said “extreme market conditions” led it to stop all withdrawals on the platform, PYMNTS reported. The company’s eponymous coin lost 50% of its value in the past 24 hours as of Monday.
Read more: Software Company MicroStrategy’s Bitcoin Losses Almost $1B
The bitcoins on MicroStrategy’s balance sheet pledged as collateral could be subject to margin calls. The firm purchased about 129,000 coins at a cost of $3.97 billion over the past two years, an average of $30,700 for each bitcoin, PYMNTS reported.
MicroStrategy founder and CEO Michael Saylor told the WSJ that the firm hasn’t received any margin calls and doesn’t expect to, and has “plenty of additional collateral should we need to post more.”
Related: Bitcoin’s Potential as ‘Digital Gold’ Loses Luster as Price Plummets
“Risky and highly liquid cryptocurrencies are usually the first to be sold in a market selloff,” Jeff Mei, chief marketing officer at blockchain technology solutions provider ChainUp, told the WSJ.
Last year the crypto industry and traditional Wall Street analysts and investors were talking up bitcoin as a hedge against inflation. They are now quick to point to the increasingly shaky economy and tumbling stock markets as the cause of its collapse, PYMNTS reported.
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None of this should be surprising, Leah Wald, the co-founder and chief executive at asset manager Valkyrie Investments, told the WSJ. Crypto is traveling along the same road that tech stocks did during the dot-com era or silver in the days of the Hunt brothers.
“All assets at the end of the day follow the same trend,” she said. “As much as we think crypto is a new asset class, it’s not.”
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