Bitcoin investors were celebrating last week as the cryptocurrency surged to a new record high of just over $126,000. But then came the weekend wipeout.
While some have been talking about cryptos as a safe haven akin to gold, the reaction to President Trump’s threat to impose 100% tariffs on Chinese imports was more in line with the volatility of equities during a trigger event.
The question of risk exposure among crypto investors was recently highlighted in new research which warned that younger and meme-focused investors are more likely to jump into investments without due diligence.
Bitcoin dropped from $123K on Friday to $107K on Saturday and along with ten other cryptos, the overall market lost approximately $500 billion, one of the biggest single-day slumps ever, and leveraged traders were forced to liquidate positions.
However, one trader was accused of insider trading as investors revealed the shorting of Bitcoin just 30 minutes before the crash via an account that had only just been opened. The trader is said to have netted an $88 million profit. The allegations have not been substantiated.
Nic Puckrin, crypto analyst and co-founder of The Coin Bureau, told InvestmentNews that investors should not be complacent about cryptos.
“The bloodbath we saw in markets over the weekend is a brutal reminder that, as the crypto market grows and matures, the risks are amplified,” he says. “The arrival of spot crypto ETFs and institutional interest has lulled investors into a false sense of security, but it remains the only market that trades after hours. In this environment, thin liquidity, overleverage, and the involvement of big players make for a toxic cocktail.”
Puckrin, whose site provides educational materials for crypto investors, says that the biggest shock over the weekend was that traders were forced out of even profitable positions due to auto-deleveraging on exchanges, a risk management mechanism that most will have not even heard about.
“It’s a blunt instrument that certainly deserves some scrutiny as exchanges conduct reviews of this mass liquidation event,” he explains. “At the very least, traders must be more aware of this risk before committing to leveraged or long/short trades.”
But while the weekend’s flash crash will have come as a shock to investors, Puckrin says there is a silver lining to this dark crypto cloud.
“Ironically, now that the dust has settled, many blue-chip tokens have seen a strong rebound – including Ethereum, which is looking particularly strong back above $4,000,” he notes. “As such, many spot investors find themselves in a similar position to where they were before the flash crash. This is certainly an argument against excessive leverage in a market with fluctuating liquidity in such an uncertain geopolitical climate.”
Puckrin adds that the crash has cleaned out excessive leverage and reset market risk for now, but warns that “Bitcoin now faces another uphill battle to break past key resistance levels that will allow it to reach a meaningful new all-time high this year.”
Majority prefer aging at home but rising costs and lack of planning threaten that goal.
A surge in AI-powered financial advice is reshaping how Americans plan for retirement, but industry voices caution that human insight remains critical.
Getting re-educated on their long-term savings potential, their clear distinction from target date funds, and synergistic effects with retirement income solutions is a must for future-focused planners and fiduciary advisors.
Investment assets drive double-digit growth in health savings accounts as new legislation expands eligibility for millions of Americans.
The Wall Street giant's updated requirement gives its advisors more leeway to pitch crypto funds, which are primed for a big bang following recent changes at the SEC.
Summit Financial CEO Stan Gregor explains how decisions around cost-cutting, growth, product launch, and company culture should all be measured against one yardstick.
Behind the rebrand is a wager that clarity and scale will define the future of advice
Get unlimited access to InvestmentNews
Copyright © 2025 KM Business Information US, Inc.
Use of editorial content without permission is strictly prohibited. All rights reserved