Written by: Boaz Sobrado, Forbes Digital Assets
Compiled by: AIdidiaoJP, Foresight News
"$84 million in crypto long positions liquidated in the past hour." Trading YouTuber That Martini Guy posted to his 705,000 followers on August 23rd, as Bitcoin briefly dropped below $76,000, before rebounding to $81,000 over the next two days, marking a weekly gain of about 25%. He wrote: "This is how leverage works. The drop forces longs to sell, the selling pressure intensifies, triggering more liquidations. A small move suddenly becomes a big move."
Tarek Mansour, CEO of prediction market Kalshi, stated that this marks Kalshi's evolution from a prediction market leader to a new-generation derivatives exchange. After the CFTC approved its spot Bitcoin perpetual futures contracts in late May, reshaping the market landscape, liquidations are now occurring in this new market. Mansour said: "A domestic, secure, and regulated perpetual contract will improve capital allocation and risk management for countless US businesses."
Kalshi's launch announcement noted that annual trading volume for offshore perpetual contracts has grown from $28 trillion in 2023 to over $90 trillion in 2025, an asset class previously "completely closed to US institutions." According to Bloomberg, after the contract officially launched on June 3rd, trading volume reached $5.5 billion in the first two weeks.
One of the Most Dangerous Crypto Products
Benjamin Schiffrin, Director of Securities Policy at Better Markets, said on the day of approval that the CFTC greenlit this contract "despite perpetual futures being one of the most dangerous crypto products for retail investors, with no enhanced investor protections in place."
Aggregator account CT News posted on August 22nd: "Leveraged traders just got schooled." At that time, Bitcoin was sliding towards $77,000, with single-hour liquidations reaching $529 million, of which $478 million were long positions. "BTC once again leading a brutal washout."
The Dump is Coming
Analyst Qmo posted on August 24th: "Bitcoin liquidation heatmap screaming 'the dump is coming'." He pointed out that a $3.3 billion short squeeze has cleared most of the short-side liquidity above $80,000, but a massive long liquidation pool is concentrated in the $62k - $67k range. "If the $82,000 resistance holds, BTC's next move might be to sweep this liquidity."
Trader Money Bunny told his 280,000 followers: "Something definitely changed here. $2.7 to $3.5 billion in short positions liquidated in 24 hours, one of the largest liquidation events on record. I won't say $80k is a sure thing this week." But he added: "Two things can be true. The shorts did get absolutely wrecked, and the higher time frame risk hasn't disappeared."
Options Can Go to Zero
Charan Dangeti, a creator partner with the paper trading app GameStock, cautioned in an interview: "People shouldn't be trading options or leverage when they're starting out, until they gain more experience." He warned that novices rarely truly understand that "options can go to zero." Even in a simulator, he still advises: "You should have some sort of risk management strategy."
Kaledora Kiernan-Linn, co-founder of on-chain perpetual platform Ostium, speaking on The On The Margin podcast about whales who might never bring their leverage onshore, said: "They don't want to put funds into traditional centralized brokers. They value the flexibility and convenience of fund movement, self-custody, and the transparency and traceability that comes with being on-chain."
Mansour revealed at a Bloomberg conference that perpetual contracts have been Kalshi's "fastest-growing product launch," and discussions are underway to expand beyond crypto. US Treasury repo offerings will expand starting September 9th, and the SEC's comment period on crypto financing closes October 20th. Schiffrin's warning remains valid: leverage "allows retail investors to hold positions far larger than the capital they've invested, potentially leading to sudden and dramatic liquidations."
