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10x Research: Cryptocurrency Market May Introduce 'Circuit Breakers' to Address Extreme Volatility
Summary: According to a report by 10x Research, the recent plunge in the cryptocurrency market has exposed deep-seated issues in exchanges' clearing and risk control mechanisms, with some platforms profiting from the event while others losing billions of dollars. The report highlights that automatic liquidation systems designed to provide liquidity have exacerbated chaos in extreme market ...
According to a report by 10x Research, the recent plunge in the cryptocurrency market has exposed deep-seated issues in exchanges' clearing and risk control mechanisms, with some platforms profiting from the event while others losing billions of dollars. The report highlights that automatic liquidation systems designed to provide liquidity have exacerbated chaos in extreme market conditions, prompting institutions to reevaluate risk management systems. There is a new focus in the industry on whether cryptocurrency exchanges should draw lessons from traditional financial markets and introduce 'Circuit Breakers' to limit extreme volatility. 10x Research suggests that if implemented, this move could permanently alter the volatility structure and profit logic of the cryptocurrency market. The report also reflects on the profound impact of the current plunge reshaping the cryptocurrency market structure, following the backlash triggered by political leverage liquidation after Musk announced Tesla's suspension of Bitcoin payments in 2021.
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Link: 10x Research: Cryptocurrency Market May Introduce 'Circuit Breakers' to Address Extreme Volatility [Copy]
