Bybit calls for transparency in crypto liquidation data amid market-wide losses
Bybit calls for transparency in crypto liquidation data
Bybit's CEO, Ben Zhou, has pledged to provide full access to liquidation data after revealing that the total market-wide liquidations on February 3 could be $8B-$10B, nearly five times higher than the $2 billion initially reported by Coinglass, a leading crypto derivatives data aggregator.
Zhou admitted that most exchanges, including Bybit, restrict access to liquidation data, making it difficult to assess the full extent of market-wide liquidations. However, following backlash from traders who suffered massive losses, Bybit has committed to publishing complete liquidation data to enhance transparency in the crypto market.
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Will Binance follow Bybit’s lead?
In response to Bybit's decision, Coinglass urged Binance, the world’s largest crypto exchange, to disclose its full liquidation data. Notably, Binance restricted access to such data in mid-2021, citing concerns over regulatory scrutiny and potential impacts on its perpetual futures business.
Despite growing pressure, Binance’s CEO Richard Teng has not directly responded to calls for increased transparency. Instead, he emphasized that crypto market volatility is expected to decline as the industry matures.
Crypto liquidations: A growing concern
Crypto liquidations occur when traders’ collateral drops below margin requirements, leading to forced sell-offs by exchanges. Unlike traditional markets, where traders receive margin call warnings, crypto exchanges can liquidate positions instantly due to extreme price swings.
The latest liquidation wave saw several high-profile traders lose millions, with some reportedly wiped out entirely. Tyler Durden, a well-known crypto investor, revealed that multiple eight-figure traders were caught in the sell-off, advising others to limit leverage risks or stick to spot trading.
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The debate over liquidation transparency is expected to continue, with market participants pushing for greater disclosure to protect traders from unexpected liquidation cascades. Whether Binance and other exchanges will follow Bybit’s lead remains to be seen.
The cryptocurrency market has witnessed a staggering collapse, with billions wiped out in mere hours. Analysts point to Donald Trump’s renewed trade tensions with major economies like Canada, Mexico, and China as a primary catalyst.
