Massive Liquidations Rock Crypto Traders
Bitcoin ( BTC) continued to plunge Tuesday morning, dropping below $70,000 as the fallout from Strategy’s sale of 32 bitcoins continued to rock the cryptocurrency market. According to Bitstamp data, the top cryptocurrency tumbled to $69,390, its lowest level in nearly eight weeks, bringing its daily losses close to 4%. The decline also means bitcoin has shed approximately $4,000 in under 48 hours, momentarily dragging its market capitalization below the $1.4 trillion threshold.
The cryptocurrency’s price action resulted in over $470 million in leveraged positions being wiped out in just 24 hours. As expected during a market downturn, liquidated long bets accounted for the lion’s share of positions at approximately $455 million. Liquidations on bitcoin alone constituted nearly 60% of the $805 million in total wiped-out leveraged positions.
While Strategy’s 32 BTC sale sparked an uproar, it barely dented the treasury company’s 843,706 Bitcoin cache—still one of the largest corporate holdings in the world. Bitcoin maximalists leaned into this narrative to downplay the move, while others defended the liquidation as standard operational overhead to fund dividend obligations. Proponents framed the cash-out not as a strategic pivot, but as a routine exercise in liability management to keep its massive financing engine running smoothly.
Critics, however, note that unlike the company’s December 2022 sale of 704 BTC—which was used strictly for tax-loss harvesting and immediately repurchased—this $2.5 million cash-out was a permanent sale to cover operational debt. They warn of a potential “death spiral” if bitcoin prices stay sideways while dividend bills pile up. The harshest critics argue that selling bitcoin just over a week after issuing more preferred stock to buy the cryptocurrency confirms their long-held belief that Strategy is running a Ponzi scheme.
Gold bug and bitcoin critic Peter Schiff also seized on Strategy’s apparent U-turn, warning investors to liquidate their holdings before the company sells again.
“ Bitcoin just traded below $71,000,” Schiff said. “If Bitcoin is this weak now, even with the Nasdaq hitting record highs, just imagine how much weaker it will be when the Nasdaq finally has a correction, let alone enters a bear market. Don’t wait for MSTR to sell more Bitcoin to sell yours.”
However, bitcoin proponents like GMI founder Raoul Pal are framing the cryptocurrency’s retreat as “a nasty correction in a bull market.” Pal added that while this happens frequently, investors often forget past cycles.
“It’s a nasty correction in a bull market,” Pal said. “I’ve been in crypto since 2013. I’ve seen many corrections, non- bear markets of 50% in Bitcoin. But people forget this every time.”
Although bitcoin had recovered slightly and was trading over $69,400 at publication time, it looked poised to drop further amid a wave of selling pressure.
