Investors trading in the futures market of Ripple’s XRP lost approximately $7.26 million in the past 24 hours as the price skyrocketed after rumors of BlackRock’s application for a spot exchange-traded fund (ETF) for the popular altcoin. Data indicates that XRP is ranked fourth after Bitcoin (BTC), Ethereum (ETH), and Solana.
False Spot ETF News Causes Hundreds of Investors to Liquidate
The price of XRP surged from $0.65 to $0.73 within 25 minutes after a tweet claimed that investment management giant BlackRock had filed an application for a spot XRP ETF in the state of Delaware, USA.
The gains obtained by someone filling out a detailed form using the name of a BlackRock executive and effectively copying a real application were quickly lost when it was revealed that the application was fake. This led to a rapid return of the altcoin’s price to previous levels and the liquidation of hundreds of leveraged investors.
In short, investors piled into futures trading for XRP as soon as news of the ETF application emerged. Data shows that over 75% of the liquidated investors were long position holders, meaning they opened positions worth approximately $5 million without confirming the ETF application.
Liquidations Concentrated on Binance and Bybit
Furthermore, data indicates that the majority of liquidations in the XRP futures markets occurred on the cryptocurrency exchanges Binance and Bybit, with position sizes ranging from a few thousand to 200 thousand dollars.
Liquidation refers to the forced closure of a leveraged position by a cryptocurrency exchange when an investor partially or fully loses their initial margin. In other words, liquidation occurs when an investor is unable to meet the margin requirements for their leveraged position (lack of sufficient funds to keep the trade open).
