Bitcoin falls as US$650 million in risky crypto bets wiped out

Bitcoin experienced a decline of up to 2.8% to $83,248 on Wednesday (Oct 7) as a wave of forced selling swept across digital-asset platforms. Ethereum also saw a 5.3% drop, reaching $2,555. Other smaller digital assets, including XRP and Solana, each fell by more than 4%. Shares of cryptocurrency-linked companies, such as Coinbase Global and Strategy, also experienced losses, with Coinbase falling 3.7% and Strategy dropping 4.5%.

Data compiled by Coinglass revealed that approximately $650 million in risky crypto bets were liquidated within the last 24 hours, reflecting a broader cooling in appetite for risk. The decline was attributed to renewed Iranian attacks in the Strait of Hormuz, which dampened hopes of returning shipping through the strategic waterway to pre-war levels, resulting in Brent crude surpassing $100 a barrel.

Analyst Dan Khus explained to Coinglass that the dip in crypto prices serves as a leverage flush rather than a downward trend, driven by crowded bets on higher prices being forced out. Most liquidations were from long positions. Meanwhile, US stocks slipped after the S&P 500 closed at an all-time high the previous session, while Europe's Stoxx 600 ended three consecutive days of gains.

A recovery in bonds also lost momentum, with the 10-year Treasury yield climbing above 5.3%. Traders are eagerly awaiting the release of Federal Reserve meeting minutes later in the day for insights into future interest rate outlooks.