News
Public · Published
Your Bitcoin trade can now get liquidated because a stock crashed
Monthly trading volume on real-world-asset perpetual futures grew from $85 billion in January to a record amount in August, with stocks accounting for a large share of that total on both DeFi and centralized venues, according to CoinMarketCap.
Published:
Updated:
What happened
Monthly trading volume on real-world-asset perpetual futures grew from $85 billion in January to a record amount in August, with stocks accounting for a large share of that total on both DeFi and centralized venues, according to CoinMarketCap.
Confirmed
Global impact / market context
This means that when stock prices crash, they can trigger automatic closures of trades tied to real-world assets, including Bitcoin. A perpetual future is a contract without an expiry date, and liquidation is when a trader's position is forcibly closed due to losses.
Analyst inference
The rise in stock-linked futures on DeFi platforms, which are decentralized applications, ties traditional markets more closely to crypto. This can increase risk because a stock downturn might force automatic sales of other assets like Bitcoin, affecting prices.
Analyst inference
What to watch
- Watch for continued growth in monthly trading volume for real-world-asset perpetual futures, as the article confirms a large increase from January to August, indicating rising investor interest. Confirmed
- Investors could track how often stock price swings lead to liquidation events, but this is a suggestion, not a confirmed fact, based on the reported data. Proposed
- If stock markets become more volatile, liquidations on these futures may increase, potentially impacting Bitcoin prices, as inferred from the growing trading activity. Analyst inference
Affected assets
- RWA — Xend Finance
- DEFI — DeFi
- BTC — Bitcoin