Nearly $900 million in crypto shorts were squeezed in a single day as bitcoin surged into the $40,000 region

Bitcoin
Bitcoin

$883 million worth of crypto short positions were liquidated in a 24-hour span amid bitcoin’s rally towards $40,000.

Data from Bybt.com compiled by The Block notes that short positions on bitcoin accounted for 81% of the squeeze, with $720 million liquidated.

Most of the crypto short liquidations happened late Sunday night as bitcoin’s price spiked 10% to break the $39,000 level for the first time in six weeks.

Ryan Todd, research analyst at The Block, told Insider that given bitcoin’s historically high price relative to past cycles, this liquidation event posted one of the largest total magnitudes of losses in dollar terms for traders who were positioned short bitcoin with margin and futures products.

“We’ve seen this in the past when bitcoin has entered a choppy trading range for several weeks, with traders positioning towards a bearish bias,” Todd said. He cited a $1 billion liquidation late in December when bitcoin broke past $20,000, and a January $800 million liquidation when bitcoin passed $30,000.

He added that he’s not surprised by the magnitude of the liquidations given the nature of the bitcoin market.

“This is business as usual for crypto – a market that is known to be highly volatile and exposed to high levels of product leverage on these exchanges. A perfect recipe for liquidations that can cut both ways depending on sharp spot movements to the up or downside,” said Todd.

As of Monday afternoon, bitcoin has jumped 18% to a 24 hour high of $40,499, according to Coinmarketcap.

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Morgan Stanley sold $5 billion in Archegos’ stocks just before wave of sales hit rivals, report says

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Traders work on the floor of the New York Stock Exchange.

  • Morgan Stanley sold about $5 billion in shares that Archegos Capital had to unload, with the sales made the night before a massive securities sale, CNBC reported Tuesday.
  • Sources told CNBC the investment bank didn’t tell the buyers that the shares it was selling would be the start of an unprecedented wave of securities sales by some investment banks.
  • Archegos collapsed after Wall Street banks forced the firm to sell more than $20 billion worth of shares after failing to meet a margin call.
  • See more stories on Insider’s business page.

Morgan Stanley sold about $5 billion in shares of now-collapsed hedge fund Archegos Capital Management the night before a massive securities sale took place, CNBC reported Tuesday, citing unnamed sources familiar with the matter.

Archegos’ biggest prime broker sold shares in US media and Chinese tech names to a small group of hedge funds late Thursday, March 25, the report said, adding that Morgan Stanley sold the shares at a discount and told the hedge funds that they were part of a margin call that could prevent the collapse of an unnamed client.

According to the report, sources said the investment bank didn’t tell the buyers that the basket of shares would be the start of an unprecedented wave of tens of billions of dollars in securities sales by Morgan Stanley and five other investment banks starting the next day, on Friday.

The sources told CNBC that Morgan Stanley had Archegos’ consent to shop around its stock late March 25.

European lender Credit Suisse said Tuesday it will likely suffer a $4.7 billion charge to first-quarter profits after Archegos failed to meet its margin requirements.

Bill Hwang, who in 2013 founded Archegos as a family office, used borrowed money to make large bets on some stocks until Wall Street banks forced the firm to sell more than $20 billion worth of shares after failing to meet a margin call.

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