Hello all! Hope you are doing well! I was just thinking about this the other day and since I'm fairly new to the game I thought I would ask the question. Over the past half year I've seen massive liquidations, both LONGS and SHORTS and I just had a couple of questions. These types of millions/billions of dollars of liquidations happen when people are using huge leverage multipliers, which some exchanges allow traders to place. They are triggered by a buildup of trades which causes a huge chain reaction. My question is this, will this type of activity which can cause massive price swings for bitcoin (5-20% increases or decreases) be around forever? Or, will they start to decrease when the price of bitcoin goes higher. Lets say theoretically bitcoin reaches the gold market cap of 10 Trillion and is 500k per coin. Will traders be less hesitant to place huge leverages on their trades?
I am completely fascinated by this topic as it seems to be a huge reason why many people are very hesitant to want to get into bitcoin in the first place. There is a lot of volatility in bitcoin as it is, but these types of swings, which no one can predict when they occur just seem to put a lot of people off to the concept of owning bitcoin. It almost seems like these events happen every month, almost multiple times in some cases.
I know I'm not the first and will not be the last person to have thought about this, but will the price of bitcoin ever be so high that these types of liquidations do not occur on this scale any more?
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