Wild Bitcoin, Ether Price Swings Amid Spot ETH ETF Decision Trigger $350M Liquidations

U.S. regulators approved listing spot ETH ETFs but have not yet cleared to trade.

AccessTimeIconMay 23, 2024 at 10:29 p.m. UTC
Updated May 26, 2024 at 9:12 p.m. UTC

Crypto prices endured wild swings on Thursday as traders anxiously awaited a U.S. regulatory decision to list spot-based ether exchange-traded funds.

Within a nerve-wracking hour leading up to the eventual approval, ETH first tumbled to $3,500 at around U.S. traditional market closing time, then surged to near $3,900 as the first unconfirmed reports of an approval appeared to eventually settle above $3,800 following the confirmation.

Bitcoin (BTC) saw a similarly hectic episode sinking to the low-$66,000s, then spiking to $68,300 before paring gains below $68,000. However, ETH performed stronger, advancing 1.5% over the past 24 hours, compared to BTC's almost 3% decline during the same period. The broad-market CoinDesk 20 Index was down 1.6% during the day.

Amid the volatile episode, liquidations across all leveraged crypto derivative positions soared to over $350 million during the day, the most since May 1, CoinGlass data shows.

Ether (ETH) price on May 23 (CoinDesk)
Ether (ETH) price on May 23 (CoinDesk)

Liquidations happen when an exchange closes a leveraged trading position due to a partial or total loss of the trader’s initial money down or "margin" – if the trader fails to meet the margin requirements or doesn't have enough funds to keep the trade open.

The lion's share of the wiped-out positions were longs betting in rising prices, worth roughly $250 million, suggesting that over-leveraged traders were caught off-guard by the sudden price plunge. ETH traders took the biggest hit, with $132 million of liquidations, followed by $70 million in BTC derivatives liquidations.

Edited by Aoyon Ashraf.


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Krisztian  Sandor

Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.