Bybit CEO Ben Zhou has raised concerns regarding the accuracy of reported crypto market liquidation figures. While reports suggested that today’s liquidations totaled just $2 billion, Zhou indicated that the actual amount could be significantly higher, ranging between $8 billion and $10 billion.
According to Zhou, Bybit’s internal data recorded $2.1 billion in liquidations on the platform alone over the last 24 hours. This amount far surpasses the $333 million reported by Coinglass, highlighting a potential issue of underreporting in the market.
Zhou acknowledged that exchanges, including Bybit, have API restrictions in place that limit how frequently data is updated. In an effort to enhance transparency, he committed to ensuring that Bybit publishes complete liquidation records moving forward.
The concern over data accuracy is not unique to Bybit, as Vetle Lunde, head of research at K33 Research, has also voiced similar sentiments. Lunde argued that since mid-2021, liquidation data has been unreliable due to restrictions placed on WebSocket APIs by major exchanges such as Binance, OKX, and Bybit. These restrictions limit the frequency of liquidation reports, significantly underrepresenting actual volumes.
Liquidations occur when traders are unable to sustain leveraged positions due to insufficient funds. While common in the volatile crypto market, the scale of today’s liquidations is among the largest in recent memory, surpassing past events like the Terra/Luna implosion and the FTX collapse.
Accurate liquidation data is crucial for understanding market sentiment, leverage exposure, and risk trends. However, some exchanges may choose to obscure the full extent of liquidations to maintain trader confidence or gain a strategic advantage.
Lunde suggested that revealing the true scale of losses could deter users, while controlled reporting may benefit exchanges with affiliations to investment firms that benefit from selective market data.
In conclusion, the accuracy of liquidation data in the crypto market continues to be a point of contention. Bybit’s CEO Ben Zhou and research head Vetle Lunde have highlighted the challenges of obtaining reliable information and the potential implications of underreporting. Moving forward, transparency and accuracy in reporting will be crucial for maintaining trust and integrity in the crypto market.