Cryptocurrency market sees R$4.3 billion in liquidations in 24 hours after sharp drop.
Fears about inflation in the United States have sent bitcoin tumbling, resulting in strong liquidations in the futures market.
The cryptocurrency market has seen just over US$700 million in liquidations in the last 24 hours. The data, released by the CoinGlass platform, indicate that the losses affected around 228 thousand investors, harmed by a resurgence of risk aversion in the market.
According to the analytics company, most of the liquidations were concentrated in long investments, which are futures contracts that project a higher value for the asset than the price at the time the contract is purchased by the investor.
Short contracts, which involve projections of a drop in price, also suffered losses. Liquidations occur when the asset experiences such a significant drop or rise that it is no longer possible to keep the contract open. Abrupt movements, such as the one that occurred in the cryptocurrency market last Tuesday, the 7th, usually generate these situations.
The losses reflect a return to risk aversion on the part of investors due to a growing fear of a new inflationary movement in the United States. The result would be a possible halt or slowdown in the current cycle of interest rate cuts in the country, which would mainly impact risk assets, such as cryptocurrencies.
Investors believe that the economic measures announced by the president-elect of the United States, Donald Trump, especially the imposition of several tariffs on products imported by the country, should have an inflationary effect on the economy. The Federal Reserve has already signaled that it should cut the country's interest rates less than initially expected.