$165M in leveraged crypto liquidations follow Bitcoin’s sudden 5% flash crash

Bitcoin traders with leveraged exposure to cryptocurrencies experienced significant losses of over $165 million in less than two hours due to a sudden 5% drawdown in Bitcoin’s price on Tuesday. The plunge occurred in the early hours of March 2 UTC, with Bitcoin dropping from $69,450 to as low as $65,970 in less than 30 minutes. This sharp decline resulted in more than $165 million in leveraged positions being wiped out, with Bitcoin and Ether longs accounting for the majority of the losses. Dogecoin and Solana also saw liquidations of approximately $6 million and $4 million, respectively. Additionally, Bitcoin exchange-traded funds (ETFs) experienced a net outflow of $86 million, ending a four-day streak of positive inflows. BlackRock’s ETF was the top-performing fund with net inflows of $165.9 million, followed by Fidelity with $44 million. However, Grayscale’s GBTC saw $302 million in outflows, resulting in a net daily outflow of $85.7 million for all funds. CoinGecko data also showed that the value of Tether, the United States dollar-pegged stablecoin, briefly wobbled around 1%, falling from its $1 peg to $0.988 during the Bitcoin flash crash. It remains unclear whether this wobble was an API error or an actual loss in value.