Liquidation

Liquidation occurs when a trader’s collateral is no longer sufficient to cover their leveraged position’s losses, triggering an automated forced closure by the exchange's liquidation engine. It is a critical risk-management mechanism that ensures the solvency of lending protocols and derivative platforms. In 2026, the focus has moved toward MEV-resistant liquidation models that protect users from predatory "cascades." This tag provides essential information on maintenance margins, health factors, and how to avoid liquidation in high-volatility environments.

14265 Articles
Created: 2026/02/02 18:52
Updated: 2026/02/02 18:52
From mNAV Premium to a $100 Billion Vision: Michael Saylor's Journey into a Bitcoin Credit Empire

From mNAV Premium to a $100 Billion Vision: Michael Saylor's Journey into a Bitcoin Credit Empire

By Lesley, MetaEra In the history of Wall Street financial innovation, few have excelled like Michael Saylor, transforming personal beliefs into corporate strategy and, in turn, reshaping the financing model of an entire industry. The chairman of Strategy (formerly MicroStrategy) is driving an unprecedented financial experiment: replacing traditional equity and debt financing with perpetual preferred stock to fund his aggressive Bitcoin accumulation strategy. According to Bloomberg, Strategy has successfully raised approximately $6 billion in capital from the market through four rounds of perpetual preferred stock issuance this year. The latest round, "Stretch" (STRC), raised $2.5 billion. Michael Saylor described STRC as Strategy's "iPhone moment," emphasizing its potential to provide Bitcoin vaults with scalable and low-volatility access to capital markets. This previously obscure business intelligence software company has leveraged such massive capital simply through its unwavering belief in Bitcoin. As of August 18, Strategy held 629,400 Bitcoins, with a total investment of $33.139 billion, worth over $72 billion at current market prices. Top 100 publicly listed companies holding Bitcoin worldwide (Source: bitcointreasuries.net) Even more striking is that retail investors accounted for nearly a quarter of the latest perpetual preferred stock issuance—a figure virtually unimaginable in the traditional corporate preferred stock market. However, behind this financial engineering effort lies a radical evangelist who once urged fans to "sell their kidneys for Bitcoin" and a legion of retail investors willing to follow his convictions. To understand this financial experiment that could reshape the digital asset industry, we need to start from the beginning. The Story and Mechanism of Perpetual Preferred Stocks Perpetual preferred stock is a hybrid financial security with no fixed maturity date, combining the guaranteed returns of bonds with the perpetual nature of stocks. The issuing company does not need to repay the principal, only pays the agreed-upon dividends periodically, allowing the company to use investor funds indefinitely. From an investor's perspective, purchasing perpetual preferred shares is equivalent to obtaining a "permanent right to receive dividends" - the returns mainly come from continuous dividend income, rather than the recovery of the principal at maturity of traditional bonds. The following table compares perpetual preferred stock, convertible bonds, and common stock across several key dimensions: In summary, perpetual preferred stock is a "third type of financing instrument" between debt and equity: For enterprises, it allows them to lock in funds for a long period of time without having to repay the principal, alleviate cash flow pressure with the help of flexible dividend arrangements, and avoid equity dilution caused by the issuance of additional common shares; For investors, although they rank below debt in the capital structure, perpetual preferred stock generally offers higher, more guaranteed returns and is paid out before common stock in the event of a company's liquidation. Because of this, it combines flexibility on the financing side with stable returns on the investment side, and is becoming an increasingly important option in corporate capital operations. Although perpetual preferred shares provide Strategy with a flexible financing method, their market volatility, liquidity and structural risks cannot be ignored. Market volatility and liquidity risk: Bitcoin price volatility directly affects Strategy's ability to repay and refinance. The burden of dividend payments increases with the scale of financing. According to Saylor's "HODL" strategy, selling Bitcoin further limits the company's channels for obtaining cash flow. Structural risks of the financing model: Dividend payments for non-cumulative perpetual preferred shares are at the issuer's discretion, which may lead to refinancing difficulties when market confidence is shaken; there is over-reliance on retail investors, and if retail enthusiasm fades, attracting institutional investors will become a challenge. Market bubbles and systemic risks: The crypto asset treasury company model may show signs of a bubble. Once market demand dries up, companies that rely on this financing model may face the risk of a broken capital chain, which in turn triggers wider market fluctuations. Since the beginning of 2024, Saylor has raised over $40 billion in equity and debt financing. So far this year, Strategy has raised approximately $6 billion through four perpetual preferred stock offerings. Saylor even claims it could theoretically raise as much as $100 billion to $200 billion. These four offerings demonstrate a clear evolution in strategy and distinct market positioning. Last month, Strategy launched STRC (Stretch), a floating-rate perpetual preferred stock designed to provide stable pricing and high returns to income-seeking investors seeking indirect Bitcoin exposure. STRC, with a $100 par value per share, will pay a monthly dividend and initially yield an annualized yield of 9%. Saylor's launch of STRC (Stretch) is centered around its accessibility. Unlike STRK, STRF, and STRD, instruments he earlier championed as innovative but overly complex or volatile, STRC is more like a yield-enhanced savings account. By focusing on short-term investments and low price volatility, it eliminates the risk associated with long-term volatility while offering higher returns than bank deposits. Its overcollateralization with Bitcoin ensures that STRC will trade close to its $100 par value even during Bitcoin price fluctuations, providing investors with a more stable and attractive investment option. Why choose perpetual preferred stocks? A fundamental shift in business models As the bottleneck of traditional financing models becomes apparent, perpetual preferred shares have become a key option for Strategy to fundamentally transform its business model in the context of compressed mNAV premiums and the exploration of new sources of funds. 1. Traditional financing models encounter bottlenecks: mNAV premium compression Strategy’s perpetual preferred stock experiment stems from a real challenge: mNAV premium compression. The so-called mNAV premium refers to the phenomenon in which Strategy's stock price consistently outperforms the net asset value of its Bitcoin. This premium was once the core of Saylor's "financial magic"—the company was able to raise funds at a price higher than the actual value of Bitcoin, effectively "buying the coin at a discount." However, Brian Dobson, Disruptive Technology Equity Research analyst at Clear Street, noted, "The mNAV premium has compressed in recent weeks, and Strategy management is understandably concerned about creating too much dilution." This shift forced Strategy to seek new financing paths. Traditional common stock issuance became significantly less efficient when the mNAV premium narrowed. While the convertible bond market offered lower costs, it eliminated retail investors, a key source of funding. The emergence of perpetual preferred stock was a necessary response to these constraints. 2. Discovering New Sources of Funding: Retail Investors’ “Faith-Driven” Model More importantly, Saylor discovered an unprecedented financing opportunity: directly converting personal influence into corporate capital. Michael Saylor currently has 4.5 million X Followers (Source: X Platform) Michael Youngworth, Head of Global Convertibles and Preferred Strategy at Bank of America, admitted: "As far as I know, no company has ever capitalized on retail investors' enthusiasm like Strategy." In the latest STRC issuance, retail investors accounted for as much as 25%, which is almost unimaginable in the traditional corporate preferred stock market. These retail investors adopt a faith-driven investment model for Strategy, providing the company with a relatively stable source of funding. Compared to institutional investors, they are less susceptible to short-term market fluctuations and are more willing to accept higher risk premiums. This unique investor structure has become a key competitive advantage for Strategy compared to traditional companies. 3. Strategic transformation and upgrading: from equity financing to a hybrid capital structure The introduction of perpetual preferred shares actually marks a fundamental shift in Strategy's business model. Under the traditional Strategy model, financing relies on rising stock prices, but this model is highly dependent on market sentiment and Bitcoin price fluctuations. The new model creates a relatively stable "middle layer" through perpetual preferred stock: preferred stock investors receive relatively certain dividend returns, while common stock shareholders bear more volatility risk. The company then receives perpetual funds with matching maturities to hold Bitcoin, a perpetual asset. This redesign of the capital structure allows Strategy to better respond to market cycles. Even if Bitcoin prices fall and the mNAV premium disappears, the company can still maintain its financing capabilities through perpetual preferred shares. 4. Ultimate goal: building a $100 billion BTC “credit” concept Saylor’s ambitions go far beyond this. He speculates that “in theory, $100 billion… or even $200 billion could be raised,” with the goal of creating a large-scale “credit” system with Bitcoin as the underlying asset. The core logic of this vision completely overturns traditional corporate financing: instead of relying on cash flow from products or services, it builds a self-reinforcing mechanism: "Holding Bitcoin → generating a stock price premium → financing to purchase Bitcoin → forming a positive feedback loop." Through multi-layered financing tools such as perpetual preferred stock and convertible bonds, Strategy seeks to transform volatile digital assets into a stable source of income, leveraging the mNAV premium to achieve arbitrage opportunities by "buying Bitcoin at a discount," ultimately building a financial empire centered around Bitcoin. However, this financial experiment is fraught with risk. If successful, Bitcoin could transform from a speculative asset into a widely accepted financial collateral. But as short-seller Jim Chanos warns, an 8-10% perpetual dividend payout could become a heavy burden if Bitcoin declines. Yuliya Guseva of Rutgers Law School has even bluntly stated, "If market appetite dries up, this model will no longer be sustainable." Saylor is betting on the future of Strategy, betting on whether digital assets can redefine the fundamental rules of the modern financial system. Conclusion: Innovation or Risk? Strategy's perpetual preferred stock experiment represents a significant innovation in the financing model for digital asset companies. Michael Saylor cleverly combined personal influence, market sentiment, and digital asset investment through financial innovation to create an unprecedented path for corporate development. From a broader perspective, Strategy's experiment represents a fundamental restructuring of the relationship between businesses and investors in the digital economy. Traditional corporate valuation systems—based on cash flow, profitability, and balance sheets—are completely ineffective here. Instead, a new value creation mechanism based on asset appreciation expectations and market sentiment is emerging. This is not only a financial innovation, but also a test of the boundaries of modern corporate theory. Regardless of the ultimate outcome, Strategy's experiment has provided a replicable template for subsequent digital asset companies. It also serves as a wake-up call for regulators: When corporate financing increasingly relies on retail investor sentiment and asset bubbles, can traditional risk management frameworks still effectively protect investor interests? The answer to this question will determine the future direction of the digital asset industry.

Author: PANews
Ethereum Crash Ahead? What Analysts Are Saying Now

Ethereum Crash Ahead? What Analysts Are Saying Now

The post Ethereum Crash Ahead? What Analysts Are Saying Now appeared on BitcoinEthereumNews.com. The Ethereum market has everyone’s attention again. Traders are weighing up whether the most recent dip is merely a bear trap or the ignition for something a lot uglier. After hitting a new peak earlier this year, ETH is now under $4,200 and threatening cascading liquidations. Perilous conditions in the crypto space are leading analysts to caution that data resembles past setups that saw massive breakdowns which led to losses. Investors are looking for options with early profit potential in this situation. MAGACOIN FINANCE presents an emerging opportunity for investors to consider. Bearish Arguments Stack Up Several analysts see storm clouds forming over Ethereum. According to data from the blockchain, if ETH drops below the threshold of $4200, then there might be liquidations of long positions of more than 2 billion dollars. This may trigger possible selloffs that will quickly push the price further down. The value of the asset has already gone down to $4100, leading to fear of panic selling. Technical experts note that some historical patterns are worrying. In the past when ETH/BTC broke down, the dollar price of ETH fell by almost 70%. Analyst Benjamin Cowen noted this. ETH may fall to the $1,200 region if history is any guide. Rising New Blood in the Market Amid the storm of troubles for Ethereum, MAGACOIN FINANCE is making significant gains and courting attention. Investors are pouring into the asset, but there are few allocations available. Experts believe that getting into this investment opportunity now could see profits similar to early Ethereum holders. With audit security, an expanding ecosystem, and predictions that it will outperform ETH in 2025, MAGACOIN FINANCE is gaining traction for those looking beyond the major battles. The rapid sellouts and growing community of the project have created lots of speculation – but with a…

Author: BitcoinEthereumNews
A Shocking $320 Million Vanishes In An Hour

A Shocking $320 Million Vanishes In An Hour

The post A Shocking $320 Million Vanishes In An Hour appeared on BitcoinEthereumNews.com. Crypto Liquidations: A Shocking $320 Million Vanishes In An Hour Skip to content Home Crypto News Crypto Liquidations: A Shocking $320 Million Vanishes in an Hour Source: https://bitcoinworld.co.in/crypto-liquidations-market-shock/

Author: BitcoinEthereumNews
Crypto Liquidations: A Shocking $320 Million Vanishes in an Hour

Crypto Liquidations: A Shocking $320 Million Vanishes in an Hour

BitcoinWorld Crypto Liquidations: A Shocking $320 Million Vanishes in an Hour A staggering event just rocked the crypto world. In a blink, a monumental $320 million worth of futures contracts were wiped out across major exchanges in a single hour. This dramatic figure is part of an even larger trend, with a total of $568 million in futures liquidated over the past 24 hours. These sudden crypto liquidations serve as a stark reminder of the market’s intense volatility and the powerful forces at play in the digital asset space. What Exactly Are Crypto Liquidations? For those new to futures trading, understanding crypto liquidations is essential. When traders use borrowed money, known as leverage, to amplify their positions, they put up a smaller amount of their own capital as ‘margin.’ This leverage can magnify profits, but it also significantly increases risk. If the market moves against a trader’s prediction, their margin balance can fall below a certain threshold. When this happens, the exchange automatically closes their position to prevent further losses for the exchange. This forced closure is precisely what we call a crypto liquidation. It’s a rapid, automatic process that can catch many off guard. The Shocking $320 Million Plunge The recent market movements saw an astonishing $320 million in crypto liquidations occur within just sixty minutes. This rapid unwinding of positions sent immediate ripples across major exchanges, demonstrating how quickly market sentiment and prices can shift. Over a full 24-hour period, the total losses climbed even higher, reaching $568 million. Such large-scale liquidations often have several immediate impacts: Sudden Price Drops: As positions are force-closed, selling pressure increases, leading to rapid price declines. Increased Volatility: The market becomes even more unpredictable, making it challenging for traders. Heightened Fear: A wave of liquidations can trigger panic among traders, leading to further selling. Why Do Massive Crypto Liquidations Happen? Several factors contribute to such significant crypto liquidations. High leverage trading is often a primary culprit. When many traders are highly leveraged in one direction, a small price swing in the opposite direction can trigger a cascade effect. This initial trigger leads to forced selling, which further drives down prices and causes more liquidations, creating a domino effect. Other contributing factors include: Unexpected News Events: Geopolitical news, regulatory announcements, or major economic data can suddenly shift market sentiment. Large ‘Whale’ Movements: A single large investor or institution making a significant trade can impact market liquidity and price. Technical Analysis Breakdowns: When key support levels are breached, it can trigger automated selling and further liquidations. Navigating Volatile Waters: Strategies for Traders Understanding the risks associated with futures trading is crucial for anyone involved in the crypto market. While the allure of amplified returns is strong, the potential for rapid crypto liquidations is equally real. Here are some actionable strategies to help mitigate the impact of sudden market downturns: Practice Prudent Risk Management: Avoid over-leveraging. Only risk capital you can afford to lose. Implement Stop-Loss Orders: These automatic orders close your position if the price reaches a predetermined level, limiting potential losses. Diversify Your Portfolio: Do not put all your capital into a single asset or highly leveraged positions. Stay Informed: Keep abreast of market news, economic indicators, and technical analysis to make informed decisions. Understand Your Tools: Know how margin calls and liquidation thresholds work on your chosen exchange. The Broader Implications of Crypto Liquidations While painful for individual traders, these events also offer insights into the overall health and maturity of the crypto market. Frequent large crypto liquidations can indicate periods of excessive speculation or underlying market weaknesses. Conversely, they can also ‘cleanse’ the market of over-leveraged positions, potentially paving the way for more stable growth by removing weak hands and speculative froth. These episodes highlight the ongoing need for robust risk management tools and investor education within the cryptocurrency ecosystem. As the market evolves, we can expect continued discussions around responsible trading practices and regulatory frameworks to protect participants while fostering innovation. In conclusion, the recent $320 million in crypto liquidations in just one hour serves as a powerful reminder of the inherent risks and rapid shifts possible in the digital asset world. While the market offers incredible opportunities, it demands respect, careful planning, and a deep understanding of its mechanisms. By prioritizing informed decisions and sound risk management, traders can better navigate these volatile waters. Frequently Asked Questions (FAQs) What is a crypto liquidation? A crypto liquidation occurs when an exchange automatically closes a trader’s leveraged position because their margin balance has fallen below a required threshold, preventing further losses. Why are liquidations sometimes so high? High liquidations often result from a combination of excessive leverage used by many traders and sudden, significant price movements in the market that go against their leveraged positions, creating a cascade effect. Can I avoid crypto liquidations? You can significantly reduce your risk of liquidation by using lower leverage, setting stop-loss orders, managing your risk exposure carefully, and avoiding over-speculation. Does a large liquidation event mean the crypto market is crashing? Not necessarily. While large liquidations indicate significant market volatility and can lead to temporary price drops, they don’t always signal a long-term market crash. They can sometimes even ‘cleanse’ the market of over-leveraged positions, potentially leading to more stable growth. What role do exchanges play in crypto liquidations? Exchanges facilitate futures trading and are responsible for executing liquidations automatically according to their terms to protect both the platform and other market participants from unmanageable losses due to highly leveraged positions. If you found this article insightful, consider sharing it with your network! Help others understand the dynamics of crypto liquidations and how to navigate the volatile cryptocurrency market more safely. To learn more about the latest crypto market trends, explore our article on key developments shaping cryptocurrency price action. This post Crypto Liquidations: A Shocking $320 Million Vanishes in an Hour first appeared on BitcoinWorld and is written by Editorial Team

Author: Coinstats
$210 Million Crypto Futures Liquidation Shakes Market!

$210 Million Crypto Futures Liquidation Shakes Market!

The post $210 Million Crypto Futures Liquidation Shakes Market! appeared on BitcoinEthereumNews.com. Urgent: $210 Million Crypto Futures Liquidation Shakes Market! Skip to content Home Crypto News Urgent: $210 Million Crypto Futures Liquidation Shakes Market! Source: https://bitcoinworld.co.in/crypto-futures-liquidation-impact-10/

Author: BitcoinEthereumNews
XRP Rockets 32,474% in Liquidation Imbalance, Final Bitcoin Block Date Revealed, Shiba Inu Mind-Blowing Comeback — Top Crypto News

XRP Rockets 32,474% in Liquidation Imbalance, Final Bitcoin Block Date Revealed, Shiba Inu Mind-Blowing Comeback — Top Crypto News

Crypto market today: key points. Saylor's reaction to Fed's changing crypto policy. White House's ex-crypto lead hired by Tether. Over 94% of Bitcoin supply has now been issued.

Author: Coinstats
In the past 24 hours, the entire network contract liquidation was US$173 million, with both long and short positions exploding.

In the past 24 hours, the entire network contract liquidation was US$173 million, with both long and short positions exploding.

PANews reported on August 24th that Coinglass data showed that over the past 24 hours, the cryptocurrency market saw $173 million in liquidated contracts across the network, including $72.1966 million in long positions and $101 million in short positions. The total amount of BTC liquidations was $10.2172 million, and the total amount of ETH liquidations was $43.4844 million.

Author: PANews
Ethereum Price Gains Edge on Bitcoin as Whale Rotation Hints at 10% Upside

Ethereum Price Gains Edge on Bitcoin as Whale Rotation Hints at 10% Upside

The post Ethereum Price Gains Edge on Bitcoin as Whale Rotation Hints at 10% Upside appeared on BitcoinEthereumNews.com. Ethereum price near $4,299 could climb 10% if $4,374 breaks. Whales sold nearly 3,000 BTC and shifted almost $800 million into Ethereum. Bitcoin risks $100,000 if support breaks, while Ethereum inflows stay positive. Bitcoin has dropped about 4.3% in the past week. Ethereum price is also lower, down about 6.2%. On paper, both coins look weak in the short term. Yet traders are noticing something different. Whales are moving out of Bitcoin and into Ethereum. The flows suggest that Ethereum is being treated as the stronger coin. If the shift continues, Ethereum’s price could climb 10% faster, retesting highs near $4,790. Ethereum Price Setup Versus Bitcoin Ethereum trades near $4,299 with resistance at $4,374. If that level breaks, the next target is $4,790. That is about 10% higher than the current price. Ethereum Price Action | Source: TradingView Bitcoin trades near $111,976. This level has been tested several times but has not broken. If buyers fail again, Bitcoin could slip closer to $100,000. This difference is important. Ethereum has a clear breakout path to higher levels. Bitcoin faces repeated failure at resistance and the risk of losing support. The price setups show why some traders, and especially whales, are turning their focus toward Ethereum. Whales Ditching Bitcoin For Ethereum The biggest story in recent days is whale rotation. A long-term Bitcoin whale, often called an OG, had held about 14,837 BTC since 2017. That is more than $1.6 billion at current prices. In the past 48 hours, this whale sold nearly 2,970 BTC, worth about $337 million. Bitcoin OG Moving To ETH | Source: X At the same time, the whale added huge Ethereum positions. This included about 135,265 ETH longs, worth roughly $577 million, and 50,472 ETH spot holdings, worth about $215 million. In total, the whale moved close…

Author: BitcoinEthereumNews
Is This Crypto Exchange Legit to Trade Cryptos in 2025?

Is This Crypto Exchange Legit to Trade Cryptos in 2025?

The post Is This Crypto Exchange Legit to Trade Cryptos in 2025? appeared on BitcoinEthereumNews.com. Margex is a crypto derivative exchange that was founded in 2019. The exchange was designed to provide an easy-to-use and secure experience for both beginners and experienced traders interested in derivatives products. Besides the comprehensive interface for trading perpetual contracts, the trading platform offers low fixed transaction fees and allows users to start trading without identity verification. Margex Exchange offers daily rewards to traders holding Bitcoin, Ethereum, and their crypto assets in their wallets. Additionally, the exchange has an extensive and standalone copy trading platform that allows beginners and busy traders to replicate the strategies of successful traders and make profits even with little time or experience. But there’s more, this Margex review provides an overview of the exchange, highlighting its key features, Margex fees, and offers a step-by-step guide on how to start trading on Margex.  Rating 4.6/5 ⭐ Security 8.5/10 Available Cryptocurrencies 8/10 Customer Service 8.0/10 User Experience 9.0/10 Is Margex Safe? Yes Margex Review – What Is It? A Comprehensive Look Margex is a cryptocurrency platform specializing in leveraged trading, offering up to 100x leverage on derivative trading pairs. The exchange supports margin trading on over 50 major digital assets, including Bitcoin, Ethereum, and others. Margex also features multicollateral wallets that let users deposit various cryptocurrencies and trade almost any pair without owning the underlying asset. Margex Exchange offers a user-friendly interface and robust security measures, including cold storage of funds and advanced encryption, comprehensive market data from multiple liquidity providers to prevent price manipulation, a copy trading feature, and a zero-fee converter for swapping cryptocurrencies. While Margex offers multiple features for derivative traders and copy traders, it does cater to traders who want to buy or sell crypto on the spot market. The exchange also lacks some features available on other exchanges, like automated trading bots,…

Author: BitcoinEthereumNews
Margex Review: Is This Crypto Exchange Legit to Trade Cryptos in 2025?

Margex Review: Is This Crypto Exchange Legit to Trade Cryptos in 2025?

Margex is a crypto derivative exchange that was founded in 2019. The exchange was designed to provide an easy-to-use and secure experience for both beginners and experienced traders interested in The post Margex Review: Is This Crypto Exchange Legit to Trade Cryptos in 2025? appeared first on CryptoNinjas.

Author: Crypto Ninjas