In the past day, the cryptocurrency markets have been experiencing significant volatility, with many coins seeing sharp declines. Despite this turbulence, reports indicate that large financial institutions are holding onto their crypto assets rather than selling off. This period of instability has led to more fluctuations in the global cryptocurrency markets, resulting in a crash that saw over $1 billion lost by traders.
According to Coinglass, approximately 300,000 traders were liquidated due to extreme and unpredictable market movements. While Binance was the most significantly affected exchange, others such as OKX, Huobi, Bybit, and BitMEX also faced casualties. The largest liquidation occurred on Huobi, where $27 million was lost in the BTC/USD trading pair.
Bitcoin’s price fell below $50,000 on Monday, marking a 28% decline from recent highs of $70,000. Despite this downturn, institutional investors like Grayscale, BlackRock, MicroStrategy, and Fidelity have not sold their Bitcoin holdings. Grayscale, for example, currently holds 2.455 million ETH valued at $7.82 billion and 271,743 BTC worth $14.36 billion. This indicates a long-term bullish outlook among these institutions despite the short-term market volatility.
In addition, Capula Management, Europe’s fourth-largest hedge fund, reported holding $500 million in Bitcoin ETFs. This significant investment could potentially encourage other institutional investors to enter the Bitcoin market and hold onto their digital assets.
Several factors have been attributed to the current crypto market plunge, including its close relationship with stock markets, geopolitical tensions in the Middle East, changes in the monetary policy of the Bank of Japan, and the interest rate position of the US Federal Reserve. On-chain analysts also pointed to specific events such as the liquidation of Jump Crypto and Mt. Gox payments to creditors as contributing to Ethereum’s decline.
The impact of the crypto market crash was not limited to just cryptocurrencies, as at least six top US trading platforms experienced disruptions, including Citi, Fidelity, E-Trade, Vanguard, TD Ameritrade, and Charles Schwab. This coincided with massive dips in the S&P 500 and NASDAQ, indicating that traditional markets also faced challenges similar to the crypto market.
Despite the market turmoil, big institutional investors like BlackRock, Fidelity, Grayscale, and Capula Management have maintained their belief in Bitcoin’s long-term prospects by holding onto their assets. This resilience from major players in the financial industry suggests a continued confidence in the future of cryptocurrencies despite short-term fluctuations.