Bybit CEO Ben Zhou has challenged reports that today’s crypto market liquidations totaled just $2 billion. Instead, Zhou suggested that the actual figure could range between $8 billion and $10 billion.
The exchange CEO pointed to Bybit’s internal data, which recorded $2.1 billion in liquidations on the platform alone over the last 24 hours. This figure far exceeds the $333 million listed on Coinglass, suggesting a significant underreporting issue.
Zhou acknowledged that exchanges, including Bybit, impose API restrictions that limit how frequently the data is updated.
He pledged to enhance transparency by ensuring Bybit publishes complete liquidation records moving forward.
Data distortion
Zhou’s statement aligns with Vetle Lunde, head of research at K33 Research, who argued that liquidation data has been unreliable since mid-2021.
He explained that significant exchanges, including Binance, OKX, and Bybit, have implemented restrictions on their WebSocket APIs, limiting liquidation reports to one per second. This policy significantly underrepresents actual volumes.
Liquidations occur when traders can no longer sustain leveraged positions due to insufficient funds. While this is common in crypto’s volatile market, the scale of today’s wipeout ranks among the largest in recent memory. It exceeds the liquidations triggered by the Terra/Luna implosion and the FTX collapse.
Liquidation data is a crucial indicator of market sentiment, leverage exposure, and risk trends. However, some exchanges may prefer to obscure the full extent of liquidations to maintain trader confidence.
Lunde argued that revealing the accurate scale of losses could deter users, while controlled reporting provides exchanges with a strategic advantage.
Additionally, specific trading platforms have affiliations with investment firms that benefit from selective market data.
Lunde concluded:
“You can hallucinate and guestimate based on liquidation volume dominance and the relevant exchanges’ open interest dominance pre-API change. This approach gives a more realistic liquidation volume estimate, but it is still wrong as it fails to account for changing behavior by market participants over the past three years while also exaggerating odd unique liquidations at certain exchanges.”
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