$3.7 billion liquidated as crypto markets react to Biden’s tax scare ๐จ This article is 4 years old...
$3.7 billion liquidated as crypto markets react to Biden’s tax scare
Blame the leveraged traders.
2 min read
Updated: Apr. 23, 2021 at 11:23 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Over $3 billion worth of crypto positions were liquidated this morning amidst a broader sell-off, data from multiple sources showed. Some market watchers attributed the drop to a proposal made by US president Joe Biden yesterday.
The crypto drop
โLiquidationsโ occur when traders borrow excess capital from brokerages/exchanges (i.e., โmarginโ or trading futures) to place bigger bets on the assets they trade.ย
They pay a fixed fee for doing so, while exchanges close out these positions at a predetermined priceโwhen the traderโs collateral is equal to the loss on that position. Such a trade is then said to be liquidated.
Yesterday, sources close to Biden reported the US would soon propose a new tax law for wealthy investors and tradersโcharging as much as 43.5% in tax for gains above $1 million. The aftermath was a sell-off in the stock market, followed by a sell-off in the commodities market, and followed by a sell-off this morning in the crypto market.
BREAKING: Stocks sharply drop to new session lows; Bloomberg reports President Biden will propose a capital gains tax as high as 43.4% for the wealthy. https://t.co/G2vjJUIJ82 pic.twitter.com/6N6hwRWBtl
— CNBC Now (@CNBCnow) April 22, 2021
The damages
As per data from analytics app Bybt, over 500,000 individual accounts got rekt today. $3 billion worth of liquidations took place, Bitcoin alone accounting for $1.3 billion of the damage.
$3.68B of positions and 583,354 traders have been liquidated in 24h. pic.twitter.com/e2ja0TNvrs
— Lex Moskovski (@mskvsk) April 23, 2021
The largest single liquidation order happened on crypto exchange Huobi: A Bitcoin position to the tune of $11.28 million.
Among other large-cap altcoins, $647.64 million of Ethereum (ETH) positions evaporated, $391.32 million worth of XRP positions were liquidated, and $137.85 million in Binance Coin (BNB) positions were liquidated.
Those who piled in on Dogecoin last week ended seeing the brutal side of crypto too: $245.59 million worth of DOGE positions were liquidated.
At press time, Bitcoin traded as low as $48,500, Ethereum at $2,100, and BNB at $470. The drop isโso farโnot as bad as last weekendโs however, over 1 million trading accounts and $10 billion were liquidated then.
Bitcoin Market Data
At the time of press 11:23 am UTC on Apr. 23, 2021, Bitcoin is ranked #1 by market cap and the price is down 7.74% over the past 24 hours. Bitcoin has a market capitalization of $921.94 billion with a 24-hour trading volume of $92.9 billion. Learn more about Bitcoin ›
Crypto Market Summary
At the time of press 11:23 am UTC on Apr. 23, 2021, the total crypto market is valued at at $1.81 trillion with a 24-hour volume of $289.57 billion. Bitcoin dominance is currently at 50.93%. Learn more about the crypto market ›
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
HTX
Huobi, a virtual asset exchange, launched a revised branding strategy on September 13, 2023, where “Huobi” will be rebranded as “HTX.” “H” stands for Huobi, “T” represents TRON with a commitment to being all in TRON, and “X” stands for the exchange.
Binance
Binance is a global cryptocurrency exchange that provides a platform for trading more than 100 cryptocurrencies.