Another Classic Example of Betting Gone. Trader Loses $12 Million Shorting Bitcoin
An unknown trader opened a short position on Bitcoin and lost about $12 million after the value of the asset went up.
An identified crypto trader lost about $12 million worth of their asset after shorting bitcoin. The Bitcoin trader took a short position or bet against the asset’s price and lost.
When a trader decides to take a short position on an asset, they bet against its price, selling it with the expectation of repurchasing it later at a lower price to realize a profit.
However, if the price of the asset reaches new highs instead of dropping, the market might force the seller to close their short position by buying back the asset at a higher price, resulting in a loss.
BTC Regains Momentum After Crashing
Regarding the trader in question, he accumulated such a significant loss after the value of Bitcoin went up earlier today.
Data on CoinmarketCap revealed that Bitcoin went from $57.9k to $62,510 between Thursday and the early hours of Friday. After a brief surge, the asset’s value has corrected and is currently exchanging hands at $60,357.
Bitcoin Crumbles to $50,000 Due to Massive Selloffs
August 5 marked a bloody Monday for crypto, with widespread losses recorded across all assets.
As the crypto went into a selling frenzy, bitcoin recorded a fall in its value not seen since February. Bitcoin’s value slipped below $50,000, touching a low of $49,000, before regaining some ground to reach $51,000 due to massive selloffs.
A massive wave of crypto liquidations triggered a historic market collapse. A large number of investors sold their assets, resulting in a $500 billion loss and a 4% decline in S&P 500 equities.
Crypto Investors Suffer Significant Losses
Crypto traders incurring substantial losses have become an unfortunate norm in the industry, frequently resulting from a combination of human fallibility, trading miscalculations, market corrections, and cyber vulnerabilities.
A recent report disclosed that the crypto market lost about $360.8 million to cyberattacks in February.
Although the follow-up report in June showed a reduction in cyber-attack-related losses to $176.2 million, this figure still represents a substantial financial loss, underscoring the ongoing challenges that crypto traders are facing in the industry.
Platforms like BtcTurk, Lykke, UwU Lend protocol, Holograph’s decentralized blockchain platform, and Velocore contributed to the June loss as they were the top 5 hacks in that month.
