Bitcoin’s suddenly drops below $80,000 The past 24 hours have seen one of the most violent liquidation events in crypto history. As traders digest the fallout from the crash, much of the attention is focused on large institutional investors, particularly Michael Saylor Strategy, whose massive Bitcoin positions are now trading uncomfortably close to their average acquisition cost.
Why did this Bitcoin crash suddenly become such a serious situation?
Currently, the entire cryptocurrency industry Witnessed the most brutal crash Historically, Bitcoin and Ethereum led the way. Notably, around $2.51 billion of leveraged positions were wiped out in a single session, making the event one of the 10 largest liquidation cascades ever recorded by the crypto market. For context, the Covid-era crash resulted in approximately $1.2 billion in liquidations, and the FTX collapse resulted in approximately $1.6 billion in liquidations.
History of cryptocurrency clearing. Source: @AshCrypto On X
According to Arkham Intelligence, large corporations actively moved Bitcoin to exchanges in the hours before and after the crash. Kraken alone released around 17,030 BTC into the market, followed by Binance with around 12,147 BTC, and Coinbase added another 9,093 BTC. Major market maker Wintermute released 3,491 BTC, while wallets labeled Trump Insider and Bybit released 2,543 BTC and 2,471 BTC, respectively.
These transfers contributed to a series of liquidations as positions caused Bitcoin to lose the $80,000 price level. without much resistance.
A notable outflow of Bitcoin. Source: Arkham Intelligence
Strategy’s Bitcoin Chest and its current status
As one of Bitcoin’s largest holders, Strategy has felt the effects of the recent selloff more directly than other companies, and its Bitcoin position remains just above loss territory.
of The company currently owns 712,647 BTC, worth $55.72 billion based on current price levels. These holdings were accumulated at an average price of $76,037 per Bitcoin, and after the sale, Strategy was only about 1.8% above break-even.
of The margin of error has narrowed significantly.but the holding is still technically profitable for now. To put this into context, when Bitcoin reached a peak of about $126,000, Strategy’s stash was worth about $81 billion, even though the company held about 70,000 bits less BTC at the time.
that 2,000 days have passed Since Strategy officially adopted the Bitcoin standard. This decision gradually tied the company’s financial performance to Bitcoin’s price movements.
At the time of this writing, Bitcoin is trading at around $78,500. An additional 3% drop from current levels would be enough to put Strategy’s Bitcoin position in the red on paper and change the story from an unrealized gain to an unrealized loss. In that scenario, the company could end up defending Bitcoin soon. Strategies in a bearish environment.
Featured image from Unsplash, chart from TradingView
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