At least US$516 million worth of long positions in cryptocurrencies have been liquidated this week, according to data from Coinglass.
See related article: Bitcoin long positions worth $1.5 billion liquidated amid crypto crash
- The crypto liquidation comes as the Nasdaq closed at its lowest since late 2020.
- Bitcoin accounted for more than US$142 million of liquidated long positions, while Ethereum crossed US$143 million.
- Bitcoin dipped 4.7% in the past 24 hours to trade at US$38,788 while ETH was priced at US$2,878 at press time, according to CoinGecko data.
- Bitcoin has increasingly started to correlate with risk-on assets such as technology stocks.
- But the cost of capital has risen owing to speculation that the Fed may act to tame inflation, already rising from higher gas prices due to the war in Ukraine.
- As the gap between returns on risk assets and the risk-free return on treasuries reduces, investors find relatively stable assets such as utilities and bonds more favorable than Bitcoin.
- Investors betting on Asia, however, received some reassurance, as there is talk of Beijing’s unveiling a stimulus to revive an economy reeling from Covid-19 related lockdowns.
See related article: Bitcoin follows blue chips south amid market turmoil