The recent flash crash in Bitcoin has sent ripples throughout the cryptocurrency landscape, notably impacting various gaming-related tokens.
On a fateful Wednesday, Bitcoin (BTC), the leading cryptocurrency, experienced a sudden drop of nearly 7%, triggering a cascading effect that saw gaming tokens lose anywhere between 5% to 15% of their value.
Following the Bitcoin crash, data revealed significant declines across several gaming tokens. Immutable’s IMX token faced a dip of approximately 9%, while The Sandbox’s SAND token plummeted by about 12%. Meanwhile, Axie’s AXS token experienced a roughly 10% decrease, with GALA’s token taking a staggering plunge of around 13%. Other notable drops included Merit Circle’s BEAM token and ApeCoin, down by 9.5% and 13%, respectively.
The repercussions of Bitcoin’s tumble exacerbated losses that these cryptocurrencies had been enduring over the past week, intensifying the impact of the flash crash early on Wednesday.
A Wave of Liquidations Surpasses $500 Million Data reported over $550 million in liquidated long positions amidst the crash. This resulted in the liquidation of 172,626 traders, with total long liquidations at $557 million and short liquidations around $58 million.
Leading the pack in liquidations were exchanges like OKX, recording over $230 million, followed by Binance at $105 million and Huobi at approximately $74 million. Bitcoin-tracked futures saw $110 million in liquidations, while Ethereum-linked futures witnessed over $82 million in the past day.
Amidst the downturn, a handful of tokens defied the trend. Axie’s Smooth Love Potion (SLP) and Yield Guild Games’ YGG tokens recorded increases of about 4% and 11%, respectively. Oasys also saw a rise of roughly 6.3% within the same period, standing out amidst the flash crash’s impact.
Despite the challenges faced by lagging gaming tokens, some have recently achieved notable milestones. IMX hit a 20-month high of $2.35 last month, reaching heights unseen since the bullish market of April 2022. GALA experienced an 18% gain during the same period, although its price has retraced to around $0.027, akin to mid-December levels.
Bitcoin’s Drop to $40,000 Amidst ETF Speculations The spate of liquidations coincided with Bitcoin plummeting to as low as $40,000, following rumors suggesting the SEC’s potential rejection of spot Bitcoin ETF applications this month.
“Matrix on Target projects a January rejection for Bitcoin Spot ETFs by the SEC, cautioning traders to hedge long exposure,” the company conveyed in a recent post on X (formerly Twitter).
The anticipation of a negative impact, should the SEC deny ETFs, might foresee a potential 20% drop in Bitcoin prices. Despite this, a positive outlook for the end of 2024 remains, amid SEC Chair Gensler’s cautious stance towards crypto.
