Are Perps and Leverage Creating Systemic Risk in Crypto Markets? Experts Weigh In

Friday’s flash crash was largely influenced by a cascade of leveraged liquidations. Will large moves like this be the new norm?

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💡 DMK Insight

The recent flash crash underscores the fragility of markets heavily reliant on leverage, suggesting that volatility may become a more frequent companion in trading. As more investors engage in high-risk strategies, the potential for cascading liquidations could reshape sentiment, prompting a reevaluation of risk management practices. This environment may lead to a more cautious approach among traders, as the fear of sudden downturns looms larger than before.