In This Article
- Why is Crypto Down Today? Bitcoin Dip Caused Over $1.7 Billion In Liquidations - The Largest Since 2021
- Weak Hands Are Being Shaken Out During This Dip With Cheap Coins Transferring To Whales And Institutions Like Blackrock
- Another Key Reason That This Is Just A Temporary Blip In The Market Before We Teleport Higher: Hyperbitcoinization
Why is crypto down today? With $1.7 billion in liquidations and the crypto market in panic mode, Blackrock and Microstrategy are buying the blood.
The cryptocurrency market has experienced a heavy sell-off and record liquidations over the past 24 hours, leaving traders and investors nervous about the future.
While Bitcoin
Bitcoin
1.29%
Bitcoin
BTC
Price
$64,231.88
1.29% /24h
Volume in 24h
$16.50B
Price 7d
orchestrated the panic, falling from $101,000 yesterday to as low as $94,725, it has since recovered well, now sitting at $97,700.
However, the sudden drop in Bitcoin’s value caused altcoins to crash significantly. The TOTAL2 index (tracking the total altcoin market cap) dropped over 15% and wiped out more than $250 billion in value.
Ethereum was also a victim of the market-wide dip, having just broken through $4,000 for the first time since March this year. It was short-lived as the price fell to $3,625 and has not recovered as much as Bitcoin. It is currently trading at around $3,750.
GM!
The biggest long liquidation of this bull cycle so far.
In the past 24 hours , 569,214 traders were liquidated , the total liquidations comes in at $1.71 billionhttps://t.co/C47AgBCcTkhttps://t.co/7aKXaaVxi3 pic.twitter.com/Z6sM3UrEWD
— CoinGlass (@coinglass_com) December 9, 2024
Why is Crypto Down Today? Bitcoin Dip Caused Over $1.7 Billion In Liquidations – The Largest Since 2021
Many newer investors believe that in a bull run, everything goes up in a straight line. However, this couldn’t be further from the truth. Dips such as this are regular occurrences, whether due to black swan events (unpredictable worldwide events negatively impacting the markets) or just the market being extremely frothy and everyone over-leveraged on longs.
In this instance, it is due to the latter. During Bitcoin’s fall to $94,725, more than $1.7 billion was wiped out due to traders being liquidated on their long positions. This was the largest long liquidation event since 2021.
With these liquidations, the market was reset as funding rates across the altcoin market were wiped clean. Funding rates represent the difference between the perpetual futures market’s price and an asset’s spot price. The funding rate ensures that the funding mechanism aligns the futures market price with the index price.
Essentially, the more bullish the market, the higher the funding rates. Funding rates being wiped with big liquidations are a common theme during bull markets and represent cool-off periods before the next leg-up begins.
Weak Hands Are Being Shaken Out During This Dip With Cheap Coins Transferring To Whales And Institutions Like Blackrock
BLACKROCK IS BUYING ETH
$500 MILLION USD JUST THIS WEEK
TOTAL ETH BALANCE +50% IN PAST 30 DAYS pic.twitter.com/xMgwgniiWe
— Arkham (@arkham) December 6, 2024
During these market-wide dips and record liquidations, smaller investors are shaken out of their positions in a tale as old as time due to fear and panic. In doing so, smart money and, in this instance, institutions have been scooping up all of the cheap tokens currently on the market.
Over the past week, on-chain intelligence platform Arkham has posted multiple transactions of corporations buying huge amounts of Bitcoin and Ethereum. World-leading investment firm Blackrock has increased its ETH position by 50%, acquiring over $500 million worth of Ethereum since the beginning of the month.
Michael Saylor’s MicroStrategy, the largest corporate holder of Bitcoin, just yesterday purchased a further $2.1 billion (21,550 BTC) at an average price of $98,783. So while the market is experiencing a cool-off, resulting in altcoins dropping 30-50% in some cases, you have the largest corporate holder of Bitcoin top-blasting over $2 billion into Bitcoin and the world’s largest asset manager buying half a billion dollars of Ethereum.
Another Key Reason That This Is Just A Temporary Blip In The Market Before We Teleport Higher: Hyperbitcoinization
Hyperbitcoinization in 2025 will be studied by Historians, the great global Bitcoin arms race, as nation-states scramble to front-run the US National Bitcoin Reserve. Haven't you realized all money is a ponzi scheme yet anon? https://t.co/XzlwObKfu4
— Luumuno | 🦧 (@samuel_cooling) December 10, 2024
Not only are corporations buying crypto in spades, but we now have a global race in which multiple leading nations are discussing starting a strategic Bitcoin reserve. Amongst some smaller nations, America, Russia, and China are all toying with the idea of creating a strategic Bitcoin reserve.
Whichever of the three is first to pull the trigger will undoubtedly create a scramble around the globe for countries to begin stacking Bitcoin before it becomes too scarce and expensive. Michael Saylor has recently pleaded with the US Government to liquidate its physical gold reserves and convert them into Bitcoin.
The US currently holds over half a trillion dollars in gold, which would effectively allow them to purchase 500,000 BTC at current prices, nearly double of MicroStrategy’s 252,000 BTC holdings.
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