Part 1 Beginner Why long-term crypto holders borrow against assets instead of selling A strategic guide to liquidity management, capital preservation, and the real tradeoff between selling and borrowing crypto Open guide 
Should we fear a deflationary collapse in Bitcoin?
In a deflationary collapse a sell-off occurs that wipes out wipes out leverage first and panic sellers next.
This article was published 3 years ago. Some details may no longer reflect current market conditions or recent developments. If you spot anything that needs an update, contact us.
Quick Take
- In a deflationary collapse, a sell-off occurs that first results in leverage being wiped out first before then affecting panic sellers.
- Bitcoin open interest is minimal, remaining at or below 2% of the market cap since Silicon Valley Bank's collapse, while holders remain price agnostic.
- The current value of the futures open interest is roughly $9.8 billion, while the market cap is just over $500 billion.
- Ethereum's open interest is slightly more leveraged than Bitcoin in terms of open interest compared to market cap.
- Ethereum's open interest divided by market cap is 2.5%, roughly $5.2 billion in open interest with a market cap of $210 billion.
- We can also see a lack of long-term holders sending Bitcoin to exchanges since the SVB collapse in March.
Market Cap $1.6T
24H Volume $33.84B
