Bitcoin drops below $80,000 as leveraged bets wipe out $404 million
Sharp dip in price triggers automated sell-offs
Bitcoin's value temporarily dropped below $80,000 on Saturday, leading to a rapid loss of about $404 million in long trading positions over a four-hour period. A long position is a bet that an asset's price will rise, and traders using extra borrowed money to increase their bets lose everything when the price falls too far. Data from CoinGlass shows that most of the $436 million in total lost bets involved positions expecting higher prices.
Ether was also heavily impacted, with $137 million in lost trades. Bitcoin experienced the biggest loss, but traders with leveraged bets on higher prices took most of the losses.
Key numbers from the latest drop
- Bitcoin fell to $79,280 around 11:20 a.m. ET on Saturday.
- $404 million in long positions were wiped out in four hours.
- U.S. spot Bitcoin ETFs lost $137.94 million in net money on Friday.
- Open interest in crypto futures fell 2.2% to $140.10 billion.
ETFs see two days of net outflows
U.S. spot Bitcoin ETFs, which are financial products that track the price of Bitcoin without people having to store it themselves, lost money on both Thursday and Friday. According to SoSoValue, the funds recorded $635.49 million in outflows on Thursday and $137.94 million on Friday. BlackRock's fund, IBIT, accounted for $110.34 million of Friday's outflows, which made up 80% of that day's total.
Arthur Hayes closes out directional trades
Arthur Hayes, a co-founder of the crypto exchange BitMEX, said early on Saturday that he closed out his fund's directional book. He wrote on X that he "dumped it all" to take profits. Hayes noted that global events seemed risky and stated he was sitting on the sidelines to wait for a safer time to trade.
He mentioned that an internal memo from the State Department showed efforts to target U.S. personnel in the Middle East, which the Associated Press reported on Friday. This was part of the broader global concerns Hayes cited.
What happens next
With open interest in crypto futures falling, traders are expected to wait and watch the global situation before making new big bets. The market has a lot of people who are waiting to see what happens next before placing bets.
Source list
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