Warsh's Hawkish Signal Triggers Crypto Liquidation Cascade Worth $488 Million

Fed Chair Kevin Warsh's speech at Jackson Hole triggered a crypto liquidation cascade worth $488 million as rate-hike expectations rose. The largest cryptocurrency, Bitcoin, dropped below $77,000 after Warsh revived the threat of higher interest rates.

Data from CryptoSlate shows that Bitcoin fell to as low as $76,909 before recovering to $77,712, down about 4% over the previous 24 hours. This was part of a broader crypto deleveraging that erased nearly half a billion dollars from derivatives traders.

The retreat accelerated after a sharp repricing of Federal Reserve expectations. Traders lifted the probability of a September rate increase to about 60% from roughly 35% before Warsh spoke, while short-term Treasury yields rose and the dollar strengthened.