Bitcoin’s Collapse Just Triggered the Biggest Margin Call Since FTX… Brace Yourself for What’s Next

If you’re like me and hold exactly zero Bitcoin, congratulations… you’re about to have the best Tuesday of your life. Just open Twitter, grab some Zyn, and watch the crypto bros spiral as they realize “the bottom is in” was just a trapdoor leading to yet another basement. At this rate, they might need an entire underground bunker.

Bitcoin has fallen 8% today, now trading at around $86,884, marking a 20% decline from its $109,000 all-time high just last month. Wall Street analysts are split between screaming “don’t buy the dip” and coping harder than my friend who got ghosted after buying his date a Louis Vuitton bag during his situationship (it doesn’t get much worse than that).

Crypto Twitter is an absolute war zone right now. Bitcoin maxis are chanting “WAGMI” (We’re All Gonna Make It) like it’s some sort of ancient ritual, despite their portfolios looking like ski slopes. Panic sellers, who swore they were in this for the long haul, are now frantically checking Zillow listings for studio apartments in their parents' zip code. That one crypto guru (the one who’s been yelling “THE BOTTOM IS IN” every week since Bitcoin was at $100K) is losing his mind trying to come up with a new way to move the goalposts. The bottom was in fact, not in. And still isn’t.

Adding insult to injury, MicroStrategy (aka Bitcoin’s biggest cult) just bought $2 billion worth of Bitcoin right before this dip. Oh, and crypto-linked stocks are getting their faces kicked in too. Coinbase, Robinhood, MARA Holdings, and Riot Platforms Inc. are all down 7-12%, proving yet again that crypto and Wall Street are locked in an abusive, codependent relationship.

This is not your average crypto selloff. This time, Bitcoin got absolutely yeeted off a cliff. The market just witnessed a $1.5 billion liquidation cascade, meaning a lot of overleveraged traders just got margin-called straight into the abyss. The Crypto Fear & Greed Index has swung hard into “extreme fear”, which in crypto-speak means even the laser-eyed, diamond-handed warriors are reconsidering their life choices and maybe even (dare I say) touching grass. 

As far as the whales (the deep-pocketed investors who actually move this market) are hanging out between $85K and $86K, waiting for retail traders to panic-sell their bags at a discount.

As if today wasn’t chaotic enough, more details are coming out about how Bybit (a Dubai-based crypto exchange) got absolutely wrecked by hackers in what is now the biggest crypto heist in history. 400,000 Ethereum tokens, worth $1.5 billion, vanished faster than a politician’s campaign promises. Bybit’s CEO, Ben Zhou, is swearing up and down that everything is fine and the company is totally solvent, but after 350,000 people rushed to withdraw their funds, it started looking a little… not fine. If you’ve ever wondered what a crypto exchange bank run looks like, it’s not pretty (remember FTX?).

It’s almost funny how quickly the Bitcoin to $250K dream crumbled. Just a month ago, Bitcoin was at $109,000, and the usual suspects were loudly declaring that Trump’s election + Bitcoin ETFs = $250K guaranteed. Yeah… about that. Since peaking, Bitcoin has been in full retreat, and those ETFs that were supposed to “change everything” are now seeing record outflows, with $1.6 billion pulled in just the last two weeks. Turns out, people love buying high and selling low. (Truly, an art form.)

At this point, crypto traders have split into three distinct groups. There are the Hopium Addicts, who are doubling down, posting zoomed-in charts with Fibonacci lines and mystical indicators that somehow always predict a pump (even though reality keeps disagreeing). Then you’ve got the Panic Sellers, watching their net worth evaporate faster than a TikTok trading guru’s credibility, swearing they’ll never touch crypto again (until the next bull run). And then there’s us (the Spectators) kicking back, watching people lose their minds, and enjoying the best free entertainment Twitter has to offer.

In all seriousness, I’m not against the idea of Bitcoin. It’s been through worse and always finds a way to claw its way back. This isn’t its first rodeo, and it sure won’t be its last. But if you’re sitting on the sidelines with zero crypto in your portfolio, congratulations… you’re getting front-row seats to one of the funniest financial meltdowns in real time. So kick back, refresh Twitter, and enjoy the chaos. And if you do own crypto? Might be a good day to close the app and touch some grass.

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Stock.News has positions in Robinhood.