The day Bitcoin almost died

March 12 saw the worst crash in bitcoin prices in seven years. What most don’t know: It could have been much worse because several factors worked together very unfavorably. An investment fund post shows how the crypto markets collapsed that day.The sharp drop in Bitcoin’s price on March 12 is far from over. It looks like Bitcoin was close to falling to 0 for a moment that day.

 

Btc price plummeted

Let’s start with what happened on the surface. On March 12, the Bitcoin price plummeted in two waves. At 12:00, it fell from about $ 7,300 to a good $ 6,000. After a breather of about twelve hours, he then broke in again between 0:00 and 3:00 a.m. and temporarily even fell below $ 4,000. Counting from top to bottom, Bitcoin lost almost 50 percent in a single day.

 

The margin cascade on BitMEX

Bitcoin derivatives are traded on BitMEX. Traders can borrow money via margin trading to open long or short positions with leverage. “With leverage” means that the amount borrowed is multiplied; “Long” means that you bet on rising prices, “short” on falling ones. Let’s say I go long with 1 bitcoin at $ 10,000. If the price goes up to 11,000, I will win $ 1,000. But if I have a leverage of 10, my stake increases tenfold, and if the price rises by 10 percent, I win not just $ 1,000 but 10,000, or lose as much if the price falls.