Following an 18% collapse in the last 24 hours in the overall cryptocurrency market, there have been a number of reports circulating around large liquidations, including those involving Justin Sun, the founder of Tron.
Rumors began to surface on the X platform early on Monday morning, implying that Justin would be liquidated. It was alleged that he and his group liquidated assets, exacerbating the market meltdown. Sun has officially refuted these accusations, highlighting the fact that he and his team don’t often use leverage trading because of its limited advantages for the sector.
The rumors about our positions being liquidated are false. We rarely engage in leveraged trading strategies because we believe such trades do not significantly benefit the industry. Instead, we prefer to engage in activities that provide greater support to the industry and…
— H.E. Justin Sun 孙宇晨 (@justinsuntron) August 5, 2024
Rather, the founder of Tron stated that he and his group concentrate more on initiatives that help businesses and the cryptocurrency sector. The Tron team, he continued, is still committed to working on blockchain projects, staking, maintaining nodes, and helping project teams with liquidity.
Liquidations on the rise
The price of Bitcoin continued to plummet, reaching $50,000, indicating the extreme volatility of the cryptocurrency industry. With a 235% increase, the daily trade volumes have reached an astounding $90 billion.
Ethereum saw $346.47 million in liquidations, while Bitcoin alone saw $362.83 million, mostly from long holdings. A total of $1.06 billion was liquidated from 278,022 dealers during this tumultuous period. The biggest liquidation order ever happened on Huobi between $27 million worth of BTC and USD. The figures highlight the strain on leveraged transactions and the current volatility of the market.
Bitcoin skeptic Peter Schiff believes the issue may deteriorate once US market trading resumes on Monday. As of right now, US futures are already much down. Schiff predicts a 30% decline and a significant liquidation in the Bitcoin ETF market.
As I warned #Bitcoin has taken out the March low. It's now trading $51K. That's a 20% decline from where it was trading when the #BitcoinETFs closed on Friday. So this is a #Crypto Black Monday. Look out below! https://t.co/CK1rHutgly
— Peter Schiff (@PeterSchiff) August 5, 2024
Spot On Chain, an on-chain tracking platform, validated Sun’s claim that despite suffering significant losses, he had not been liquidated. According to statistics from Spot On Chain, Sun has amassed 377,590 ETH across three wallets since February 2024, which is roughly equivalent to $1.15 billion.
Even though the price of Ethereum is currently trading far below Sun’s average purchase price, his wallet addresses still contain 1,554 ETH, or around $3.55 million. He also has substantial holdings of wstETH, EETH, and stETH.
Sun announces $1 billion fund
Additionally, Sun declared the creation of a $1 billion fund in an effort to calm the cryptocurrency community and stabilize the market. According to him, the fund’s goals are to dispel misinformation, increase investment, and offer liquidity.
Amidst persistent market turbulence and concerns about a potential US recession, some experts are conjecturing that the US Federal Reserve may act by reducing interest rates before to the September meeting. Speculation has increased and market tensions have increased despite the possibility that such intervention may calm the market. Schiff’s caution over a possible “Crypto Black Monday” highlights the hazards associated with leveraged trading positions and the general lack of clarity.
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