Print Bitcoin already has its whale: a futures trader loses 416 million dollars Bitcoin already has its whale: a futures trader loses 416 million dollars
When it seemed that bitcoin had found some relief in the support of $ 7,500, a new negative news has come to shake strongly the trust in the popular cryptocurrency, which does not win for frights. In this case it is a massive misguided bet on the Hong Kong futures market, known as OKEx, which left an operator unable to cover its losses.
Specifically, the operator had open bitcoin futures a long or buying position with a notional value of 416 million dollars last Friday, which coincided on Tuesday with a collapse of the currency that left the investor with total inability to cover the losses caused by the opposite movement of the position taken, despite the attempts of those responsible for the OKEx to stop the bleeding by urging the operator to close this position, which finally had to be liquidated the force.
The problem is that, because OKEx has a policy of "socialized recovery" for when such cases occur, so the reckless movement of "the Hong Kong whale" will force the other operators with unrealized gains during the week to yield 18% of their profits. While this is not something that has not happened on other occasions in this market, the size of the hole and, above all, the asset on which it has been produced, bitcoin, has attracted a lot of attention in cryptocurrency circles.
The episode puts a lot of pressure on Bitcoin, because it exposes the risks of operating with the cryptocurrency in a market that is scarcely regulated, which allows high leverage and lacks the protections that investors expect in the traditional equity and bond markets. This new breach in confidence adds to the closures of platforms that we have already seen, such as Mt Gov, along with computer attacks or allegations of the use of cryptocurrencies for money laundering and illegal activities.
"Everyone is talking about this," says Jake Smith, a bitcoin.com advisor based in Tokyo, regarding the troubled OKEx operation. The truth is that the market risk team contacted the operator immediately and asked him to partially close the position, in view of the decline that was signaling bitcoin, however, the client refused to cooperate, so OKEx took the decision to partially freeze the account and thus prevent the risk from being transmitted to the entire market.