Bitcoin News Today: Leverage and Trump Policies Fuel Crypto's $455M Loss Crisis

The crypto market's recent turbulence has exposed the risks of high-leverage trading, with seven prominent traders on HyperLiquid losing over $455 million in the past eight months as liquidation volumes surged past $1.65 billion in the last 24 hours alone, according to a Panewslab report. The losses, driven by rapid price swings and leveraged bets, have reignited debates about the sustainability of such practices, with critics labeling them "irresponsible" and warning of systemic risks, as noted in a Cryptopolitan report.

Among the hardest-hit traders is Machi Big Brother, a Taiwanese-American crypto personality who saw his $44.8 million profit plunge to $15 million after a partial liquidation left him with just $16,770 in account value. Similarly, James Wynn's $87 million profit evaporated into a $21.9 million loss, while Qwatio, known for aggressive short positions, lost $28.8 million after re-entering the market with 20x leverage on XRP, according to Cryptopolitan. These cases highlight the fragility of leveraged strategies in a market prone to sudden reversals.

The volatility has coincided with a broader regulatory shift in the U.S., where Donald Trump has positioned the country as a "Bitcoin superpower." During a speech at the American Business Forum in Miami, Trump announced an executive order ending what he described as the federal government's "war on crypto," emphasizing the need to counter China's growing influence in digital assets, as detailed in a Blockonomi article. The move aligns with his push to establish a Strategic Bitcoin Reserve and a Digital Asset Stockpile, leveraging seized crypto assets for long-term holdings, as the Blockonomi piece explains.

Trump's policies have added another layer of uncertainty to an already volatile market. The U.S. Supreme Court's recent debate over his tariff actions under the International Emergency Economic Powers Act (IEEPA) has further complicated trade policy expectations, with Bitcoin trading near $100,000 as investors brace for potential shifts in regulatory authority, according to a Coinotag report. Analysts warn that even if tariffs are curtailed, Trump could invoke alternative statutes to maintain pressure, prolonging market instability.

The interplay between leverage-driven speculation and regulatory overhauls underscores the crypto industry's dual-edged nature. While high-leverage trading offers outsized rewards, the recent liquidation wave—exacerbated by the October 11 market crash—has demonstrated its perils, as the Panewslab report showed. At the same time, Trump's pro-crypto agenda, including the GENIUS Act to regulate stablecoins, signals a strategic pivot toward embracing digital assets as a pillar of U.S. economic strength, according to Blockonomi.

As the market navigates these crosscurrents, experts like former FTX US President Brett Harrison caution that extreme leverage "encourages people to blow out their accounts as fast as possible," urging a focus on long-term, secure trading practices, a point emphasized in the Cryptopolitan analysis. The coming months will test whether regulatory clarity and risk management can coexist in a sector still grappling with its identity.