Crypto meltdown turbocharged by mix of leverage and liquidations

Liquidations and leverage appear to have turbocharged this week’s cryptocurrency meltdown.

Bitcoin dropped as much as 31% Wednesday to near $30,000, and Ether was 44% down at less than $2,000 at one stage. While both have recouped some of the losses, those crashes spread plenty of pain across crypto assets. There were $9.4 billion of liquidations in the 24 hours through 9 a.m. Thursday in Singapore, as more than 887,000 traders liquidated, according to data from Bybt.com. Exchanges offer so much leverage that new traders will always be at risk of forced sales when virtual currencies drop, Fundstrat Global Advisors LLC’s Tom Lee said in a note after the big tumble.