XRP Futures Traders Nurse $7M Loss as BlackRock ETF Rumor Causes Wild Price Swings

Traders invested in XRP futures lost some $7.26 million in the past 24 hours as prices moved wildly following rumors of a BlackRock (BLK) exchange-traded fund (ETF) filing.

The liquidations were fourth behind those of bitcoin (BTC), ether (ETH) and Solana’s SOL futures, data shows.

XRP prices jumped to 73 cents from 65 cents in 25 minutes after a tweet that suggested financial behemoth BlackRock had filed for an XRP ETF in the U.S. state of Delaware. Reputed crypto news firms reported on the filing as fact, which also helped amplify prices.

However, the filing turned out to be fake: Someone had likely filed out an elaborate form using a BlackRock executive’s alias and effectively replicated an actual online filing. This caused prices to quickly tumble back to previous levels.

This is false! Confirmed by BlackRock by me. Some whacko must have added using BlackRock executive name etc. Cmon man. pic.twitter.com/cDpnycYwjQ

— Eric Balchunas (@EricBalchunas) November 13, 2023

But leveraged traders had already piled on their traders by then. Data shows that over 75% of traders from the total XRP liquidations were longs, or bets on higher prices, meaning those traders placed nearly $5 million in orders in that short time span without confirming the authenticity of the filing.

Most of these trades were placed on crypto exchange Binance and Bybit, data shows, with position sizes ranging from a few thousand to over $200,000.

Liquidation refers to when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. It happens when a trader is unable to meet the margin requirements for a leveraged position (fails to have sufficient funds to keep the trade open).