Tom Lee speculates wounded market makers behind crypto crunch

Tom Lee, chairman of BitMine, suggested that the recent slump in the cryptocurrency market may stem from liquidity issues among market makers. Following an unprecedented crash that liquidated $20 billion, market makers found themselves in unexpected trouble, leading to decreased capital for operations. Lee emphasized that as market makers attempt to reduce their balance sheets, they may further exacerbate the downward pressure by needing to sell off assets. He compared the role of market makers to that of central banks, indicating that the market could experience continued difficulties for a few weeks until these liquidity problems are addressed. Lee also referenced similar situations in 2022, predicting that the current distress might take time to resolve before a healing process begins for cryptocurrencies like Bitcoin and Ethereum.

Source 🔗