Many people 'burned' their accounts on the day Bitcoin peaked

Predicting that Bitcoin price would go down, Hoai Phong decided to "short" on the evening of November 21, but the next morning, he received an email notifying him that his account had been "burned".

"When Bitcoin reached $94,000 per coin last night, I thought the price could not go up anymore so I decided to predict a price decrease. But this morning, I received an email notification from the exchange that the order was liquidated when Bitcoin reached over $99,000," said Mr. Phong (Quang Ngai) who lost nearly $10,000 overnight.

A user "bears losses" when using the Future feature on a cryptocurrency exchange. Photo: Bao Lam

People like Mr. Phong are currently using Futures - a futures contract trading feature, available on many cryptocurrency exchanges such as Binance, MEXC, Bybit... Players can place orders predicting an increase (Long) or decrease (Short) in the price of a cryptocurrency in a certain period of time without owning that coin and earn a certain amount of money if correct. If the prediction is wrong and reaches the threshold, the order will be liquidated, meaning they will lose all the money in that futures contract.

Not yet to the extent of "burning" his account like Mr. Phong, Mr. Tran Minh, a cryptocurrency player in Ho Chi Minh City, said he is "holding on to losses" because he predicted that the price of Bitcoin would decrease from over 91,000 USD, using 125 times leverage (125x). His account is currently negative by more than 700%, equivalent to nearly 3,000 USD.

On November 22, Bitcoin price surged to $99,000, breaking all previous records. This year alone, the cryptocurrency has increased by 160%.

According to Coinglass statistics , over $400 million worth of approximately 160,000 Futures players have "evaporated" in the past 24 hours . The largest liquidation order worth $4.6 million was placed by someone on the Binance exchange that the ETH/BTC (Ethereum/Bitcoin) pair would fall in price.

Bitcoin price as of noon on November 22. Source: CoinMarketCap

Some experts warn that playing Futures can be addictive. Hoang Viet, a blockchain expert in Ho Chi Minh City, said that forms of playing like Futures on cryptocurrency exchanges are gambling.

"Predicting price ups and downs is like gambling. You can easily participate, but you can also lose everything very quickly," Mr. Viet warned.

Meanwhile, speaking to the Washington Post in 2022, New York therapist Aaron Sternlicht said that playing with cryptocurrencies is more addictive than sports betting and traditional financial investments, because cryptocurrencies can be traded around the clock, unlike stocks.

Currently, cryptocurrency addiction is not officially recognized as a mental health disorder. "Over the past five years, we have seen a sharp increase in the number of cryptocurrency traders, and a corresponding increase in the number of addicts," said Lia Nower, a specialist at Rutgers University in New Jersey. "Excessive trading of cryptocurrency, with the hope of making multiple returns, is gambling."

“Although more research is needed, cryptocurrency addiction could be viewed as a form of gambling addiction,” Sternlicht commented.