The cryptocurrency market is known for its volatility and the high amount of leverage offered to retail traders, but the highest leveraged trades actually have a very limited impact on the market, according to FTX’s Sam „SBF” Bankman-Fried.
The volatile market, which has seen days in which hundreds of thousands of traders have faced liquidations in their futures position, is known for cascading events. During some market drops, liquidations of levered futures positions can exacerbate drawdowns, leading to further liquidations.
On December 4, for instance, there was $1.3 billion worth of long liquidations in bitcoin futures across several venues, according to data compiled by The Block Research.
Still, Bankman-Fried told The Block in a recent episode of The Scoop that the highest levered trades likely are not having a big impact on these drawdowns. That’s because most of those highly levered traders are small.
„If you have a very big position you’re going to be posting substan
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