‘My crypto life is over’: US$19 billion sell-off triggers angst on Chinese social media
Exchanges will forcibly sell a trader’s leveraged positions if their losses approach the amount of their initial investment
Chinese cryptocurrency traders are bemoaning their losses after the biggest price gyrations in years, as Monday’s bounce in bitcoin’s prices above US$114,000 brought relief to some traders after last week’s massive sell-off.
“From hundreds of thousands to millions to zero in a few days, my crypto life is over,” one user wrote on Xiaohongshu on Sunday.
Others cautioned people against trading in crypto futures contracts, which allow traders to make leveraged bets on digital asset prices at a specific time in the future. Exchanges would forcibly sell a trader’s leveraged positions when their losses approach the amount of their initial investment, a mechanism known as liquidation.
“Plan to buy an electric bike to deliver food and survive first,” another Xiaohongshu user wrote on Sunday. “Hope people see this as a lesson and stay away from the futures trap.”
The plunge in cryptocurrency prices last week followed the latest escalation of the US-China trade war, as US President Donald Trump announced an additional 100 per cent tariff on China and export controls for software. Crypto analytics firm Coinglass called the sell-off “the largest liquidation event in crypto history”.