In a dramatic turn of events, XRP’s value experienced a significant fluctuation, soaring from 65 cents to 73 cents within a mere 25 minutes. This sudden surge was triggered by a tweet hinting at a major financial development: the alleged filing of an XRP ETF by global investment giant BlackRock in the United States.
This rumor, which later proved to be unfounded, had a substantial impact on traders dealing in XRP futures. The fallout was severe, with losses amounting to approximately $7.26 million over the past 24 hours. These losses were a direct result of the erratic price movements spurred by the ETF speculation. Notably, XRP’s liquidation figures were only surpassed by those of other major cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), and Solana (SOL).
The Ripple Effect on Leveraged Traders
The initial spike in XRP prices was fueled by reports from reputable cryptocurrency news outlets, which mistakenly treated the ETF filing rumor as credible. The rumor suggested that BlackRock had completed an official ETF filing in Delaware, USA. However, it was later revealed that the filing was a hoax, meticulously crafted using a BlackRock executive’s alias to mimic a legitimate filing. This revelation caused XRP prices to plummet back to their previous levels.
The impact on leveraged traders was particularly pronounced. Data indicates that over 75% of the total XRP liquidations were long positions, where traders bet on rising prices. In the brief window influenced by the rumor, these traders had placed orders close to $5 million, without verifying the authenticity of the ETF filing news. The majority of these trades occurred on prominent cryptocurrency exchanges like Binance and Bybit, with individual position sizes ranging from a few thousand dollars to upwards of $200,000.
In the context of cryptocurrency trading, liquidation refers to the forced closure of a trader’s leveraged position by an exchange. This action is taken when a trader’s initial margin is partially or wholly lost, and they fail to meet the margin requirements to maintain the open position. The XRP ETF rumor incident serves as a stark reminder of the volatility and risks inherent in cryptocurrency markets, particularly for leveraged traders.
