FalconX's Aya Kantorovich explains what's been behind bitcoin's latest price gyrations

Episode 30 of Season 3 of The Scoop was recorded remotely with The Block’s Frank Chaparro and FalconX’s Aya Kantorovich. 

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Aya Kantorovich, head of institutional coverage at FalconX, has been experiencing a bit of déjà vu. 

Kantorovich, a former associate at crypto hedge fund Pantera, joined The Scoop to unpack the crypto market's recent bouts of volatility and how the market is stuck in a cycle of retail-led drawdowns. FalconX — an aggregator of crypto trading flows — has a window into both the retail and institutional market. 

According to Kantorovich, liquidations across off-shore market venues, cascading liquidations, and the inability for traders to access crypto exchange platforms drive prices down. When money can't move around, price drawdowns are amplified. 

"We saw $2 billion worth of liquidations happening across BTC," she said. "Retail liquidations was a large portion of this ... and then a cascading effect."

"When you have this level of heightened volatility you see some exchanges begin to shut down their trading capabilities and when these centralized trading platforms shut down those capabilities then traders don't have the ability to top off on their margin so you see a continued cascade," she added. 

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Kantorovich doesn't think this is a cycle that will break because many new institutions have to sell when the price reaches a certain threshold. Unlike crypto native whales, which have driven the buying at the dip, large billion-dollar plus asset managers "have a completely different level of drawdowns that they're allowed to maintain."

"Let's say the market falls down by 30%, they have a fiduciary obligation to take money off the table," she said. "These aren't the momentum diamond hands that we're so used to seeing in crypto."

"I think the reason for that is we are going to continue to see institutions that do not have a momentum-long venture persona ... and that could be both good or bad for the space."


© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Frank Chaparro is Host of The Scoop podcast and Director of Special Projects. He also writes a biweekly newsletter. Chaparro started his career at Business Insider, where he specialized in the intersection of digital assets and Wall Street, market structure, and financial technology. Soon after joining Business Insider out of Fordham University, Chaparro was interviewing top finance and tech executives, including billionaire Mark Cuban, “Flash Boys” star Brad Katsuyama, Cboe Global Markets CEO Ed Tilly, and New York Stock Exchange President Tom Farley. In 2018, he become a sought after reporter in the crypto world, interviewing luminaries such as Tyler Winklevoss, the cofounder of Gemini, Jeremy Allaire, the CEO of Circle, and Fundstrat head Tom Lee. For inquiries or tips, email [email protected].