BlackRock’s Crypto Initiative Triggers 5% Rally, Short Positions Liquidated

The crypto market experienced a notable surge as BlackRock, the world’s largest asset manager, revealed its foray into asset tokenization through a fund named BUIDL, targeting tokenized products on Ethereum.

This development has served as a significant catalyst for positive sentiment within the crypto sphere. Bitcoin (BTC) surged to $67,300, marking a 4.9% increase within 24 hours, while Ether (ETH) rose by 4.7% to surpass $3,400 in trading value.

Concurrently, the CoinDesk 20 (CD20), representing the most liquid cryptocurrencies, witnessed a rise of approximately 5% at the time of reporting. Bradley Park, an analyst at CryptoQuant, emphasized BlackRock’s move as a pivotal moment, underscoring the escalating interest and adoption of blockchain technology and tokenized assets among traditional financial institutions.

Short Sellers Encounter Losses

Amidst the bullish momentum in the crypto market, short sellers, especially those betting against Bitcoin and Ether, have faced notable losses.

BlackRock's Crypto Initiative Triggers 5% Rally, Short Positions Liquidated
Short sellers face losses as leveraged futures positions worth $100 million are liquidated amid a bullish market.

CoinGlass data shows that in the past 24 hours, over $100 million in leveraged futures positions have been liquidated, with around $60 million in short BTC positions and $42.8 million in short ETH positions.

This wave of liquidation highlights the inherent volatility and unpredictability of the crypto market, which frequently triggers swift price fluctuations catching traders by surprise.

Optimism Fueled by Global Easing Cycle

The recent surge in crypto prices finds additional support from broader macroeconomic trends, particularly the commencement of a global easing cycle initiated by major central banks.

BlackRock's Crypto Initiative Triggers 5% Rally, Short Positions Liquidated
The global easing cycle stimulates optimism in the crypto market, supported by central bank rate cuts and liquidity easing.

Last week, the Swiss National Bank (SNB) surprised markets with a benchmark interest rate cut, followed by similar actions from the Central Bank of Mexico. Additionally, the Federal Reserve, the European Central Bank, and the Bank of England have all signaled intentions for liquidity easing in the forthcoming months.

This macroeconomic shift toward more accommodative monetary policies has bolstered investor confidence across diverse asset classes, including cryptocurrencies.

Reflecting on this trend, the founder and manager of the Blokland Smart Multi-Asset Fund remarked on X (formerly Twitter), “Even though a market correction seems long due, the medium term looks pretty upbeat for equities, residential real estate, gold, bitcoin, etc., if this is the case.”

Sajda Parveen
Sajda Parveen
Sajda Praveen is a market expert. She has over 6 years of experience in the field and she shares her expertise with readers. You can reach out to her at [email protected]
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