The crypto market crashed suddenly today, Dec. 26, erasing most of the gains made earlier and triggering more liquidations for bulls. Bitcoin price dropped to $86,000 before bouncing back to the current $87,300. The market cap of the industry retreated to $2.9 trillion.
Crypto Market Crashed as Top Bitcoin Holders Dumped
Top crypto analysts blamed the crash on the dumping of Bitcoin by some of the industry’s biggest players. Data compiled by Arkham shows that Binance dumped 10,155 coins worth over $893 million.
Coinbase dumped 10,113 coins, while Wintermute, BlackRock, and Kraken sold thousands of coins. Cumulatively, these companies dumped Bitcoin worth over $2.5 billion, adding to selling pressure.
Allegations that these large companies are manipulating the market have jumped in the past few months. These allegations soared after October 10, when millions of users liquidated over $20 billion within a single day.
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One possible explanation for BlackRock’s increased selling is that IBIT had outflows on Wednesday. Cumulatively, Bitcoin ETFs shed over $175 million in outflows on Friday.
Upcoming Bitcoin and Ethereum Options Expiry
The other main reason why the crypto market crashed suddenly is that investors are anticipating the upcoming options expiry worth over $28 billion.
Bitcoin options worth over $23 billion and Ethereum tokens worth over $4 billion will expire on Deribit, the biggest company in the options trading industry. These will be the biggest options expiries this year. Historically, cryptocurrencies often experience substantial volatility ahead of and after a major options expiry.
Soaring Gold and Silver Prices
Meanwhile, the crypto market crash happened as gold and silver prices gained steam, reaching their new all-time highs.
Gold jumped to a high of $4,522, while silver soared to $78. Copper also jumped to an all-time high of over $12,000 per ton. One potential implication is that some crypto investors are now rotating into these metals.
Indeed, third-party data shows that the SPDR Gold ETF (GLD) and the iShares Silver ETF (SLV) have accumulated over $3.8 billion and $1.6 billion in assets this month.
In contrast, spot Bitcoin ETFs have shed over $804 million in the same period, while Ethereum funds shed $564 million. More traders have shifted to other assets, such as the stock market, which has continued to perform well.
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