Arthur Hayes Evaluated the Altcoin Crash: What Will Happen Next?

A significant upheaval occurred in the cryptocurrency world one morning. Binance exchange saw many altcoins lose over 90% of their value within a few minutes. Particularly, tokens like IoTeX (IOTX) dropped to almost $0, causing panic among investors.

Arthur Hayes, co-founder of BitMEX, stated in a social media post regarding the event that major centralized exchanges (CEX) automatically liquidated collateral tied to cross-collateralized positions. Hayes said, "According to what is being talked about on the street, many altcoins have evaporated due to the automatic liquidations by the large exchanges. Congratulations to those who bought cheap. Many quality altcoins will not easily return to those levels."

Hayes' assessments have brought up the possibility of altcoin prices recovering after this drop. According to on-chain data, liquidity quickly depleted after the liquidation chain was triggered on Binance and many other exchanges. However, Hayes argues that the current declines are a temporary liquidity shock and that projects with strong fundamentals will regain their value.

This sudden fluctuation in the crypto market is said to have caused significant losses, especially for traders using leverage. Analysts expect high volatility in the coming days, noting that altcoin prices are in a process of seeking equilibrium again. In this context, it is emphasized that investors should be cautious and keep an eye on quality projects.