Are Perps and Leverage Creating Systemic Risk in Crypto Markets? Experts Weigh In
Crypto markets witnessed their largest liquidation event on record, with over $19 billion in positions wiped out during Friday's flash crash. The scale of the carnage has sparked a debate about whether rampant leverage trading is introducing systemic fragility into digital asset markets.
Decentralized exchange Hyperliquid's rise has democratized access to extreme leverage, prompting centralized platforms to compete on margin offerings. Bitwise, among other institutional players, is reportedly reevaluating risk exposure as perpetual futures markets show signs of strain.
Liquidation cascades—once rare black swan events—appear increasingly frequent as traders amplify bets through borrowed capital. The very instruments designed to boost returns now threaten market stability when positions unwind violently.
