Institutions took crypto profits amid 'shaky' macro picture, trading execs say

Cryptocurrency traders have been gripped by a drawdown that executives in the market say is tied to institutional selling. 

The price of bitcoin plunged below $43,000 overnight Saturday, falling from highs near $57,000 during Friday's session. While the price of bitcoin has since pared some of those losses -- trading above $49,000 at the time of writing -- trading executives tell The Block that large institutional selling triggered a broader market shift.

Specifically, one trading executive said that there appeared to be an institution that sold more than $500 million in bitcoin on Friday morning. 

That selling triggered "aggressive liquidations" in the crypto derivatives market, the person added. As noted by The Block's Larry Cermak, the market saw more than $1.3 billion in long positions liquidated in the move from $51,000 to $42,000. Total open interest in the derivates market also fell from $21.6 billion to $16.7 billion in less than an hour. 


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Such liquidations are not atypical in the crypto market. Over the last year, certain market drawdowns have been exacerbated by over-levered traders on offshore venues being liquidated. 

"Everyone has had a good year, and with this player coming from traditional finance, they have their eye on the macro environment which currently looks shaky," noted Aya Kantorovich, an executive at crypto firm FalconX.

Over the last few weeks, traders across crypto and equities have had to digest headlines related to the emerging variant of COVID-19 known as omicron and indications from the U.S. Federal Reserve that faster tapering might be on the horizon. 

Still, Kantorovich told The Block there are buyers still at play. 

"Across our desk we are seeing a lot of OTC with primarily buyers coming in to take long exposure," she said. 

About Author

Frank Chaparro is the Editor At Large at The Block. Chaparro started his career at Business Insider, where he specialized in the intersection of digital assets and Wall Street, market structure, and financial technology. Soon after joining Business Insider out of Fordham University, Chaparro was interviewing top finance and tech executives, including billionaire Mark Cuban, “Flash Boys” star Brad Katsuyama, Cboe Global Markets CEO Ed Tilly, and New York Stock Exchange President Tom Farley. In 2018, he become a sought after reporter in the crypto world, interviewing luminaries such as Tyler Winklevoss, the cofounder of Gemini, Jeremy Allaire, the CEO of Circle, and Fundstrat head Tom Lee. He runs his own podcast The Scoop and writes a biweekly eponymous newsletter. He leads special projects, including The Block's flagship podcast, The Scoop. Prior to The Block, he held roles at Business Insider, NPR, and Nasdaq. For inquiries or tips, email [email protected].