Are Perps and Leverage Creating Systemic Risk in Crypto Markets? Experts Weigh In
The biggest liquidation event in crypto history took place on Friday, with over $19 billion worth of positions getting rekt in just 24 hours, according to CoinGlass. In the days since, industry experts have undertaken a postmortem on the chaos—and the rise in leverage has been highlighted as a potential risk to the crypto market’s long-term health.
The surge in popularity in Hyperliquid, a decentralized exchange that specializes in perpetual futures trading, has made leverage in crypto more accessible than ever before, leading to rival exchanges competing over their leverage offerings. Some experts believe this is creating systemic risk, with asset management firm Bitwise even considering a change in strategy as a result.
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