Ants (individual investors) around the world are investing in bitcoin, a representative cryptocurrency (virtual currency), with a whopping 100-fold increase in leverage, and this is the cause of the recent bitcoin plunge. Time) reported.
CNBC said that the recent plunge in bitcoin is also a part of the’don’t ask investment’ of individuals who took excessive risks in the cryptocurrency market.
Asian brokerage firms such as BitMEX allow leveraged transactions of up to 100:1.
Leverage investment is a method of investing by borrowing money from a brokerage company to maximize the investment effect. If the market price rises, you can get huge profits, but if the market price falls, you will incur more than the principal.
CNBC analyzed that the recent plunge in bitcoin was due to the fact that ants who had invested in leverage were forced to liquidate their accounts when the price of bitcoin fell.
According to the cryptocurrency data company’bybt’, bitcoin ants that held leveraged positions were reported to have liquidated $12 billion (1.5 trillion won) last week alone. It is known that 800,000 accounts have been liquidated.
Brian Kelly, CEO of BKCM, said, “All investors’ liquidation prices are roughly the same,” said Brian Kelly. “When you reach that point, the price is plummeting as automatic sell orders take place all at once.”
