Tron Founder Justin Sun Bursts Rumors of Leverage Trading Liquidations

by

As a seasoned crypto investor with a decade of experience under my belt, I’ve seen more than my fair share of market volatility and wild rumors. The recent sell-off has been no exception, with the whispers about Justin Sun’s liquidations adding fuel to the fire. However, having learned from past lessons (and countless lost weekends staring at red candles), I take such speculations with a grain of salt.

The significant decrease (18%) in the overall crypto market within the last 24 hours has caused a substantial ripple effect, resulting in massive sell-offs from overextended trading positions. As Ethereum plummeted by more than 20%, speculation spread that Tron’s founder, Justin Sun, suffered losses amounting to approximately $152 million due to liquidations of his leveraged positions. However, Sun himself has refuted these claims, bringing clarity to the situation regarding the liquidation incidents.

Justin Sun Clears Air on Liquidations

The recent sell-off in the crypto market in the Asian trading hours on Monday has led to more than $1 billion in total crypto market liquidations. Most of the traders with leveraged long positions got Rekt with rumors suggesting that Justin Sun was one of them.

Justin Sun potentially getting liquidated could be the reason for that nasty -20% wick on $ETH
— Johnny (@CryptoGodJohn) August 5, 2024

Regarding the speculation, Tron’s creator, Justin Sun, has refuted the claims, explaining that him and his associates seldom employ leverage trading tactics. According to Justin Sun, such trades offer little advantage to the cryptocurrency market.

Rather than making direct investments, the creator of Tron emphasized that he and his team prioritize actions that bolster the cryptocurrency sector and aid entrepreneurs. Furthermore, they continue to dedicate their efforts to tasks like developing blockchain projects, staking, managing nodes, or aiding other teams in securing liquidity.

Let me clarify some misinformation: Our positions aren’t being shut down. We seldom employ highly-leveraged trading tactics as we think they don’t substantially contribute to our industry. On the contrary, we focus on activities that offer more robust industry support.

— H.E. Justin Sun 孙宇晨 (@justinsuntron) August 5, 2024

Liquidations On the Rise

Currently, there’s significant fluctuation in the cryptocurrency market. The price of Bitcoin plummeted to around $50,000, but it has since rebounded to approximately $52,800 by the time this was written. Moreover, the daily trading volumes have experienced a massive surge, reaching an impressive $71.8 billion – a 161% increase.

According to Bitcoin skeptic Peter Schiff, the current state could deteriorate further when U.S. trading resumes on Monday. The U.S. futures are already experiencing significant losses at present. Schiff anticipates a large-scale selloff in the Bitcoin ETF market, projecting a potential drop of approximately 30%.

Just as I mentioned earlier, Bitcoin has dropped below its March low and is currently trading at $51K. This represents a 20% fall from its price when the Bitcoin ETFs closed last Friday. Consequently, we’re seeing a sort of ‘Crypto Monday’ reminiscent of the stock market crash in 1987. Be cautious, the downward trend might continue!

— Peter Schiff (@PeterSchiff) August 5, 2024

Despite concerns about an impending U.S. recession and a potential economic downturn, discussions revolve around the possibility of such an event happening in the American economy. Yet, certain sources indicate that the Federal Reserve might take action as early as before September to implement a 50 basis point reduction in interest rates. In simpler terms, some believe we may experience a rough patch economically in the U.S., but there’s speculation that the Fed could lower interest rates by a half percentage point before September to ease these concerns.

Read More

2024-08-05 10:58