Investors have just witnessed $1.5 billion worth of trading orders wiped out in the digital currency market after a sharp price drop.
The move suggests the rally was fueled by US President Donald Trump's support for the troubled asset.
During the session on September 22, Bitcoin fell as much as 2.9%, falling below $112,000 per USD. Meanwhile, Ether - the second largest digital currency - plunged about 9% to $4,075/ETH.
The sell-off wiped out $1.5 billion in leveraged bets from more than 407,000 traders, according to data from Coinglass. When losses exceed a certain threshold, they are forced to liquidate their positions, a mechanism known as a “margin call.”
The sell-off has pushed the total market capitalization of digital currencies below $4 trillion, according to data from CoinGecko. Shares of the exchange Coinbase also fell 2.7% in pre-market trading in New York.
Cryptocurrency prices fell amid concerns that both the assets and companies in the space are overvalued, said Edouard Hindi, chief investment officer at asset manager Tyr Capital.
Digital asset management firms typically hold large amounts of digital currencies. Mr. Hindi noticed that these firms were buying fewer assets, the bitcoin and ether markets froze, liquidity decreased, and many investors liquidated their positions.
Trump has previously called cryptocurrencies a “fraud.” However, he has taken a much friendlier stance in his second term. President Donald Trump and his wife, Melania, have launched their own digital currencies.
Trump Media and Technology, owner of the Truth Social platform, has also signed a multi-billion dollar deal with the Crypto.com exchange.
Since returning to power, the Trump administration has enacted a series of pro-crypto policies including the creation of a strategic Bitcoin reserve and the dismissal of numerous lawsuits against companies in the industry.
The US Congress has also passed laws allowing banks to issue stablecoins (digital currencies designed to maintain price stability by being tied to real-world assets such as fiat currencies or precious metals).
President Trump also said that pension funds should be allowed to invest in digital currencies.
Thanks to these policies, bitcoin has continuously set new highs since Mr. Trump's election victory in November 2024. Last month, the currency hit the $120,000 mark for the first time – double its value a year earlier./.
Source: https://www.vietnamplus.vn/thi-truong-tien-ky-thuat-so-boc-hoi-hon-15-ty-usd-sau-giai-doan-thang-hoa-post1063489.vnp
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