How a Crypto Short-Seller Earned $300,000 in Just One Month
Wednesday, 14 August 2024, 12:05
Quick Overview of the Trade
A cryptocurrency short-seller achieved an impressive profit of nearly $300,000 in less than one month. Utilizing decentralized finance (DeFi), the trader opened a short position against MakerDAO (MKR) from July 19 to August 13.
Details of the Transaction
- The trader borrowed 500 MKR and sold it for $1.37 million USDC at a token price of $2,740.
- They closed the short position by buying back the borrowed MKR plus interest for $1.07 million USDC.
Risk Considerations
Engaging in short-selling in the crypto market carries significant risks:
- The asset price may continue to rise, resulting in potential losses.
- Extended holding can increase the loan's interest, leading to a higher repayment amount and possible liquidation.
Conclusion
While this operation reflects the opportunities present in DeFi trading, it is crucial for traders to implement strong risk management strategies due to market volatility.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.