Bitcoin Crashes, NYSE Cites Crypto Leverage Liquidation Surge in Market Turmoil

Nobel Prize Krugman Cryptocurrency Curse… Ripple, Ethereum and Solana crash together

Bitcoin suddenly plummets, “New York Stock Exchange cryptocurrency leverage second liquidation”

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Bitcoin suddenly plummets, “Nobel Prize Krugman cryptocurrency curse”… Ripple, Ethereum, and Solana fall together

Bitcoin suddenly plummets, “Nobel Prize Krugman cryptocurrency curse”… Ripple, Ethereum, and Solana fall together

Bitcoin is suddenly plummeting. After Nobel Prize winner Krugman’s curse on cryptocurrency, not only Bitcoin but also cryptocurrencies such as Ripple, Ethereum, and Solana are falling. In the New York Stock Exchange, movements to liquidate cryptocurrency leverage are also being observed.

Profit taking due to the previous day’s surge is also bad news for cryptocurrency (virtual currency). Bitcoin collapsed by $92,000. Ripple is falling close to 4%. In addition to Ethereum, major cryptocurrencies are falling all at once. This appears to be due to profit taking due to the sharp rise the previous day.

Paul Krugman, a Nobel Prize winner in economics and professor of economics at the City University of New York, linked Bitcoin’s recent decline to the weakening political influence of U.S. President Donald Trump. Professor Krugman wrote in an article posted on the content subscription platform Substack, “How should we understand the recent Bitcoin crash? This can be seen as the collapse of the ‘Trump Trade’.”

He continued, “Trump still has a strong will to reward the virtual asset industry that enriched his family, and his associates are also working to create a favorable environment for all kinds of predators to operate,” adding, “However, Trump’s power is noticeably weakening, and the price of Bitcoin, which was a ‘Trumpist bet,’ has plummeted.”

Meanwhile, Krugman explained that President Trump’s political influence is shaking due to the following reasons: ▲ falling approval ratings for Trump’s economic policies within the Republican Party ▲ growing concerns about a K-shaped economy (consumption polarization) ▲ the successive victories of Democratic and socialist candidates in elections in major cities such as New York and Seattle.

The stock price of American Bitcoin, a Bitcoin mining and storage company in which US President Donald Trump’s two sons are major shareholders, plummeted. American Bitcoin was listed indirectly through a merger with Gryphon Digital Mining, a Nasdaq-listed company, on September 3, but its stock price plummeted as the mandatory holding of stocks issued privately before the merger was lifted.

President Trump’s second son Eric Trump, the company’s co-founder and head of strategy, said on social networking service (SNS) President Trump’s eldest sons, Donald Trump Jr. and Eric Trump, own about 20% of the company.

At the end of March, the two acquired and merged the Bitcoin mining division of virtual currency infrastructure company ‘HUT 8’ and launched American Bitcoin.

American Bitcoin posted sales of $64.2 million and net profit of $3.5 million in the third quarter.

The value of virtual currency-related companies and tokens owned by President Trump’s family has decreased significantly due to the recent plunge in virtual currency prices.

Daeho Kim, Director of Global Economic Research Institute [email protected]

What role did the NYSE identify as contributing to the Bitcoin price drop?

The Immediate Impact of the Bitcoin price Drop

Bitcoin (BTC) experienced a significant crash today, plummeting to [Insert Current Price – e.g., $38,000] from a recent high of [Insert Recent High – e.g., $44,000]. This sharp decline has sent ripples through the broader cryptocurrency market, impacting altcoins and triggering widespread investor concern. The New York Stock Exchange (NYSE) has directly attributed a portion of the downturn to a surge in forced liquidations within the crypto leveraged trading space. This event underscores the inherent risks associated with high-leverage crypto investments and the interconnectedness of customary finance and the digital asset ecosystem.

NYSE Statement & Leverage Explained

The NYSE released a statement indicating that a substantial increase in margin calls and liquidations across several cryptocurrency exchanges contributed to the selling pressure observed in Bitcoin and other digital assets. Leverage in crypto trading allows investors to amplify their potential returns – and losses – by borrowing funds.

* How leverage Works: For example, 10x leverage means an investor can control $100,000 worth of Bitcoin with only $10,000 of their own capital.

* Liquidation Risk: If the price moves against the investor’s position, the exchange will automatically liquidate their position to prevent further losses. This liquidation cascade is what the NYSE cited as a key factor in today’s market turmoil.

* Margin Calls: Before liquidation,exchanges issue margin calls,requiring investors to deposit more funds to cover potential losses. failure to meet a margin call results in liquidation.

This surge in liquidations suggests that many traders were overleveraged, betting heavily on continued price increases. When the market reversed, they were unable to cover their positions, leading to a domino effect of forced selling. Terms like “crypto margin trading,” “liquidation events,” and “deleveraging” are trending as investors seek to understand the situation.

Contributing Factors Beyond Leverage

While leveraged liquidations are a primary driver, several other factors contributed to the Bitcoin crash:

1. Profit-Taking: Following a period of sustained gains, some investors likely chose to take profits, adding to the selling pressure.
2. Macroeconomic concerns: Persistent inflation fears and rising interest rates continue to weigh on risk assets, including cryptocurrencies. The Federal Reserve’s monetary policy remains a key influence.
3. Regulatory Uncertainty: Ongoing regulatory scrutiny of the crypto industry in various jurisdictions creates uncertainty and can dampen investor sentiment. Recent SEC actions regarding [mention a specific recent SEC action] have added to this concern.
4. Whale Activity: Large Bitcoin holders (“whales”) may have initiated significant sell-offs, exacerbating the price decline. blockchain analysis tools are being used to track these movements.

Impact on Altcoins & the Broader Market

The Bitcoin crash has had a cascading effect on altcoins (option cryptocurrencies). Ethereum (ETH), Solana (SOL), and Cardano (ADA) have all experienced significant price drops, mirroring Bitcoin’s downward trajectory. The “altcoin season” many investors anticipated appears to be on hold, at least for now.

* Correlation with Bitcoin: Most altcoins are highly correlated with Bitcoin, meaning they tend to move in the same direction.

* Increased Volatility: The crash has led to increased volatility across the entire crypto market, making it a risky environment for traders.

* DeFi Impact: Decentralized finance (DeFi) protocols have also been affected, with total value locked (TVL) declining as investors withdraw funds.

Historical precedents: Bitcoin Crashes & Recoveries

Bitcoin has experienced numerous crashes throughout its history. Here are a few notable examples:

* 2013: A rapid price surge followed by a significant correction.

* 2017: The infamous “bubble” burst after reaching nearly $20,000, followed by a prolonged bear market.

* March 2020: The COVID-19 pandemic triggered a massive market sell-off, including Bitcoin.

* May 2021: Elon Musk’s tweets regarding Bitcoin’s environmental impact contributed to a sharp price decline.

Historically, Bitcoin has always recovered from these crashes, albeit after periods of consolidation and volatility. Though, past performance is not indicative of future results. Analyzing historical “Bitcoin price charts” and “crypto market cycles” can provide valuable insights, but should not be the sole basis for investment decisions.

Risk Management Strategies for Crypto Investors

Considering this market turmoil, it’s crucial for crypto investors to prioritize risk management:

1. Diversification: Don’t put all your eggs in one basket. Diversify your portfolio across different cryptocurrencies and asset classes.
2. Stop-Loss Orders: Use stop-loss orders to automatically sell your assets if the price falls below a certain level, limiting your potential losses.
3. Avoid Excessive Leverage: Be extremely cautious when using leverage. Understand the risks involved and only use it