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CNBC on Tuesday attempted to dissect what is going on with the wild cryptocurrency price swings. Nearly all have been affected, including the Mother of All Coins Bitcoin.
The media outlet reports that traders taking excessive risk in the bitcoin market being forced to sell when the price goes down were the bigger culprits for last week’s 30% drop in bitcoin prices, according to analysts. Music to the ears of Elon Musk perhaps. He was the initial scapegoat.
Brian Kelly, CEO of BKCM, pointed to firms in Asia such as BitMEX allowing 100-to-1 leverage for cryptocurrency trades.
Robinhood does not allow this type of activity while Coinbase allows it only for professional traders.
CNBC also reports that Bitcoin traders liquidated roughly $12 billion in levered positions last week as the price of the cryptocurrency spiraled.
The price of cryptocurrencies tanked last week, with bitcoin losing roughly a third of its value in a matter of hours. The price of Bitcoin was sitting around the $38,000 mark as of late Tuesday Eastern Standard Time.
- Aaron Goldstein, Gambling911.com
