Part 3/10:
The futures market is where the most drastic impacts of leverage are observed. Here, traders bet on the future price of cryptocurrencies without holding the underlying assets. When traders are liquidated due to insufficient margin, it can lead to sudden market downturns.
The report underscores that significant market events in 2022, including the collapse of major players like Terra and FTX, were exacerbated by excessive leverage and forced liquidations.