- January 6, 2024
- Posted by: [email protected]
- Category:
Bitcoin’s recent flash crash, witnessed on Wednesday, has reverberated throughout the cryptocurrency landscape, leaving an indelible mark on gaming-related tokens. The unprecedented 7% decline in Bitcoin (BTC), the dominant cryptocurrency by market capitalization, set off a cascading effect, causing gaming tokens to plummet in value by anywhere from 5% to 15%.
According to CoinGecko data, Immutable’s IMX token dropped by 9%, while The Sandbox’s SAND token dropped by 12%. Axie’s AXS token fell nearly 10%, while the GALA token fell approximately 13%. Additionally, Merit Circle’s BEAM token and ApeCoin fell by 9.5% and 13%, respectively.
The impact was not limited to these tokens, as others such as the GMT token from the “move-to-earn” game Stepn, Enjin Coin, Parallel’s PRIME token, and WAX also faced losses within the past day. Notably, these cryptocurrencies had already been experiencing declines in the week leading up to Bitcoin’s flash crash.
The flash crash led to the liquidation of over $550 million in crypto-long positions, with 172,626 traders facing liquidation. The lion’s share of these liquidations was taken by crypto exchange OKX at over $230 million, followed by Binance at $105 million, and Huobi at around $74 million. Bitcoin-tracked futures experienced $110 million in both short and long liquidations, while Ethereum-linked futures saw over $82 million in liquidations.
However, amidst the general downturn, a few tokens managed to defy the trend. Axie’s Smooth Love Potion (SLP) and Yield Guild Games’ YGG tokens saw increases of approximately 4% and 11%, seemingly unaffected by Bitcoin’s plunge. Oasys also experienced a rise of about 6.3% within the past day, joining the limited group of tokens that evaded the adverse effects of the flash crash.
Despite the challenging circumstances for lagging gaming tokens, it’s crucial to acknowledge that some of them have recently achieved notable milestones. IMX, for instance, reached a 20-month high of $2.35 last month, reflecting prices not seen since the bullish market of April 2022. GALA also witnessed an 18% gain during the same period, although its price has since retreated to around $0.027, akin to mid-December levels.
The flash crash that saw Bitcoin drop to as low as $40,000 was attributed to rumors surrounding a delay in approving spot Bitcoin ETF applications by the SEC. A report from Matrixport projected a January rejection and cautioned traders to hedge long exposure, anticipating a potential -20% Bitcoin price drop upon ETF denial. Despite this, a positive end-of-2024 outlook is anticipated, balancing the current market turbulence with long-term optimism.
