TL;DR
The global crypto market crashed in just four hours, losing $128 billion, on Friday. This happened shortly after a record $19 billion worth of leveraged positions were liquidated. Bitcoin, Ethereum, and XRP saw major drops. Experts blame automatic sell-offs, weak global markets, and lack of clear crypto rules. The Financial Stability Board has warned that poor regulation could hurt global financial systems.
Massive sell-off hits major cryptocurrencies
The cryptocurrency market saw a sharp fall on Friday. Investors lost $128 billion across global exchanges in just four hours. Bitcoin dropped by over 2% to $105,875.80, Ethereum fell more than 6%, and XRP was down by 1.89%. Altcoins and cryptocurrencies other than Bitcoin saw even bigger losses. Some lost up to 80% of their value on certain exchanges. Analysts say these smaller coins were hit harder due to low trading volumes and high risk.
$19 billion liquidated in largest crypto crash
The crash followed a wave of liquidations last week. Over $19 billion worth of leveraged positions were wiped out. These are risky trades where investors borrow money to buy crypto. When prices fall, exchanges automatically sell these assets to cover losses. This chain reaction caused prices to fall further. Many traders were forced to exit the market. Experts say this was the largest liquidation event in crypto history.
Lack of regulation increases market risk
The Financial Stability Board (FSB), a global group that monitors financial systems, raised concerns on Thursday. It said there are “significant gaps” in how countries manage the fast-growing crypto market. The FSB warned that without proper rules, crypto could harm the wider economy. It had earlier suggested that crypto should follow the same rules as banks and stock markets. But many countries have not acted yet.
Global uncertainty adds to crypto market pressure
Market experts say global tensions are also affecting crypto. Juan Perez, a trading expert, Monex USA, said crypto usually does well when global markets are strong. However, the world economy is shaky at the moment; stocks are not doing well, and that makes it hard for crypto to grow. He added that weak fundamentals are making it difficult for Bitcoin and Ethereum to hold their value. Until global conditions improve, crypto may continue to face pressure.
