Bitcoin (BTC USD) Dogecoin ($DOGE) Ether ($ETH) Cryptocurrency: Latest Prices

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Liquidations and leverage appear to have turbocharged this week’s cryptocurrency meltdown.

Bitcoin dropped as much as 31% Wednesday to near $30,000, and Ether was 44% down at less than $2,000 at one stage. While both have recouped some of the losses, those crashes spread plenty of pain across crypto assets. There were $9.4 billion of liquidations in the 24 hours through 9 a.m. Thursday in Singapore, as more than 887,000 traders liquidated, according to data from Exchanges offer so much leverage that new traders will always be at risk of forced sales when virtual currencies drop, Fundstrat Global Advisors LLC’s Tom Lee said in a note after the big tumble.

“What causes such deeper pullbacks are a case of system overload, liquidations, and such factors,” said Vijay Ayyar, head of Asia Pacific at Luno Pte. “Crypto is still a much ‘wilder West’ than any other asset class where you can trade on some exchanges for up to 50-100X leverage,” and “what we’ve seen is a big funding reset across exchanges due to overleveraged traders.”

Bitcoin and Ethereum’s spectacular ride is arguably the third time in the space of two months when margin calls have roiled markets, after Archegos Capital Management’s forced sales in late March and the tumble in Taiwan equities that accelerated last week.