In a sign of the scale of the crypto crash, more than $1 billion in digital assets were liquidated on June 14, according to data from Coin Glass.
Around $480 million has been wiped out on centralized exchanges in the last 24 hours. Ether represents 42% or $202M of margin calls, while $154.4 of BTC positions were taken out.
On-chain liquidations also increased, with 370 margin calls generating over 53 million DAI on MakerDAO alone.
In contrast, 401 liquidations worth $55.8 million have taken place in the past 30 days. There is also an estimate $202M value of risk positions on the Aave top lending protocol if the Ether price drops below $1,009.
Liquidation describes when a leveraged position is forcibly closed due to the value of the collateral assets backing it falling below the margin threshold required to keep it open.
The liquidations were suffered by both institutional investors and individuals.
On Wednesday, The Defiant reported that leading venture capital firm Three Arrows Capital had closed positions worth $400 million and that hundreds of millions more loans remained at risk.
Danny Yuan, head of trading at 8 Blocks Capital, a partner of Three Arrows, said he learns that the hedge fund has undergone major liquidations. Yuan adds that the company continues to hold many assets on other platforms, calling for asset freezes to repay creditors.
Continued debt reduction
Twitter analyst, degentrading, speculated that a default by Three Arrows could pose systemic risk to the crypto market, as it has borrowed funds from many of the industry’s largest lenders. “The collapse of a major fund and a major lender will reduce overall credit in the system and lead to continued deleveraging,” the analyst said.
Embattled centralized lender Celsius is fighting desperately to avoid its own nine-figure liquidation event.
Celsius added large sums of WBTC in recent days to protect a $231.4 million DAI loan it had previously taken out using the MakerDAO protocol. Hundreds of millions of assets appear to have moved from Celsius-controlled wallets to FTX, a centralized exchange, on the same day the company halted customer withdrawals, according to Etherscan. Celsius has since added around 8,200 BTC as collateral and repaid $47.1 million DAI from its MakerDAO position.
Bobby Ong, the co-founder of CoinGecko, told The Defiant that it appears opportunistic traders have been looking for the liquidation prices of Three Arrows Capital and Celsius amid the recession.
“I find it rather surprising that several of these big crypto companies have completely mismanaged their finances…and failed to anticipate the possible bear market ahead,” Ong added.