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Recent remarks from Bybit CEO Ben Zhou indicate that crypto liquidations following new US tariffs could surpass $10 billion, sparking concern in the crypto community.
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Zhou emphasized that the actual liquidation figures are significantly higher than reported, largely due to data limitations imposed by major exchanges, including Bybit.
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In Zhou’s words, “During the 2022 FTX collapse, recorded liquidations were 4-6 times worse than publicized,” illustrating a trend of underreporting in the volatile crypto market.
This article examines Bybit’s CEO Ben Zhou’s warning about significant underreported crypto liquidations post-US tariffs, raising alarms for investors and analysts alike.
Bybit’s Zhou Sounds Alarm on Liquidations Amid Tariff Impacts
Ben Zhou, the CEO of Bybit, has raised critical concerns as the crypto market grapples with extreme volatility triggered by recent US tariffs on imports from Canada and Mexico. Zhou asserts that estimated liquidations could range between $8 to $10 billion, a stark contrast to lower reported figures. The market, still shaken by the repercussions of the FTX collapse in 2022, has been hit hard by the framing of these statistics.
These new tariffs, initially designed for economic measures, have inadvertently disrupted the crypto ecosystem. Zhou elaborated on how the crypto industry experienced losses estimated at $2 billion, although he firmly believes that such numbers grossly understate the reality of the situation:
“I am afraid that today real total liquidation is a lot more than $2 billion; by my estimation it should be at least around $8-10 billion. FYI, Bybit 24-hour liquidation alone was $2.1 billion,” Zhou stated, emphasizing the need for transparency in reporting.
The Comparison with the 2022 FTX Collapse
Reflecting on past experiences, Zhou draws parallels to the devastating impacts of the 2022 FTX collapse, which exposed significant discrepancies in reported and actual liquidation figures. During that tumultuous period, reported liquidations were grossly underrepresented, signaling to investors that the crypto space is subject to substantial misreporting:
“The real liquidations during the FTX collapse were at least 4-6 times worse,” Zhou noted. These revelations underscore a critical issue in the crypto reporting framework—one that many stakeholders believe needs to be addressed urgently for the sake of overall market stability.
As Bitcoin’s value fluctuated and dipped below $95,000, the overarching impact was felt across various cryptocurrencies, including Solana and Ethereum, which also reached yearly lows.
Analyzing the Broader Market Impact
If Zhou’s assertions hold weight, investors could face a painful market correction. Notably, earlier predictions from industry leaders, such as former BitMEX CEO Arthur Hayes, have raised the alarm about potential BTC prices plummeting to $70,000 amidst ongoing market volatility.
Despite the shadows cast by these events, the crypto sector has historically bounced back from severe downturns. Bitcoin’s current valuation remains significantly higher than six months ago, suggesting that while short-term fluctuations may be alarming, long-term prospects for recovery persist.
Opportunities Amidst Uncertainty
Investors are encouraged to remain vigilant, as the current downtrend could present valuable purchasing opportunities for long-term holders. With the crypto landscape evolving continuously, understanding these dynamics is critical for making informed decisions.
Conclusion
As the crypto market contends with the aftershocks of US tariffs and the ongoing specter of past collapses, the need for transparency surrounding liquidation data has never been more paramount. Ben Zhou’s insights serve as a wake-up call for both investors and industry leaders to prioritize accountability in reporting. This overview of current dynamics emphasizes a broader need for accuracy and foresight as the market navigates these turbulent waters.
