Institutional Lender Two Prime Suggests Bitcoin Sell-Off Could Be Driven by Its Own Collateral

Retail Borrowers Affected by Bitcoin Price Drop: Retail borrowers using Bitcoin-backed loans faced margin calls and were forced to sell as Bitcoin's price slid towards $60,000, while institutional borrowers managed to meet their margin requirements more effectively.

Liquidity Risks in Crypto Lending: Alex Blume highlighted that a significant amount of loans linked to Coinbase were at risk of liquidation due to a 30% decline in Bitcoin prices, with total liquidatable loans across platforms climbing to approximately $812 million.

Market Sentiment and Price Movements: Bitcoin was trading at around $70,552, showing a 4% increase over 24 hours, but retail sentiment remained bearish amid high volatility and liquidity concerns in the market.

User-Level Liquidation Exposure: Data indicated that over 14,500 users were flagged as liquidatable under a 50% drawdown scenario, reflecting the heightened risk faced by participants in the crypto lending market.