When Bitcoin Magic Fades: Derivative Traders Lose Big!

The market takes a wild ride and crashes hard

It feels like just yesterday when everyone was talking about Bitcoin – the magical crypto currency that was going to make all investors rich! But, as is usually the case, the market took a wild ride and the Bitcoin Crash of December 2019 left investors and traders in shock and dismay.

When it was all over derivative traders had lost a whopping $202 million in just 24 hours. Ouch!

Predictably, this crash sent shockwaves throughout the market as everyone was left to figure out what happened, who lost the most money, and what went wrong. Here’s what we know so far:

What Caused The Bitcoin Crash of 2019?

According to experts, this crash was largely due to a combination of factors, including:

  • The sudden and unexpected fall in Bitcoin’s price

  • A massive sell-off of Bitcoin by derivative traders

  • The rising popularity of alternative cryptocurrencies (altcoins)

The sudden fall in Bitcoin’s price was caused by a variety of factors, but some experts point the finger at overconfidence among investors and traders who were over-leveraging their bets in a highly volatile market.

The Biggest Loser

Not surprisingly, the biggest loser of the Bitcoin Crash of 2019 is derivative traders. Their trading strategies have left them holding the bag for the majority of the losses as their positions got liquidated.

Day traders who had opened positions on Bitcoin prior to the crash weren’t as badly affected as the derivative traders, but they too suffered losses as the market crash wiped out their profits.

The Road To Recovery

It’s still too early to tell what the long-term implications of the Bitcoin Crash of 2019 will be, but one thing is for sure: the market won’t stay down forever.

As always, investors and traders should be cautious and monitor the market closely as we head into 2020. The key is to trade smart and diversify your portfolio to reduce your risk.

Good luck out there!