What is Ashdraked?
Let's find out Ashdraked meaning, definition in crypto, what is Ashdraked, and all other detailed facts.
Ashdraking is the complete loss of all capital invested by a trader. The term relates directly to a loss experienced after shorting Bitcoin (BTC). The phenomenon was named after a Romanian Bitcoin trader known by the pseudonym “Lord Ashdrake”. Lord Ashdrake was a well-known cryptocurrency skeptic in the Bitcoin community.
His strategy relied on shorting Bitcoin – expecting the cryptocurrency to lose its value. His strategy saw considerable success between 2014 and 2015, a period when Bitcoin had lost nearly half its total value. Lord Ashdrake was known for encouraging other traders to adopt a shorting strategy.
Prior to the incident, Ashdrake notably shorted Bitcoin when the cryptocurrency broke $300. In the following weeks after this drop, Bitcoin prices saw a rapid increase, nearly going up to $600. Lord Ashdrake maintained his short position, ultimately leading to him losing his entire invested capital.
In 2017, the Chicago Board Options Exchange (CBOE) started allowing traders to trade Bitcoin futures. This is a process of placing bets on the BTC price without the risk of actually holding cryptocurrency. This was noted in the financial press, with crypto-skeptics predicting that large short positions would be held by institutional investors predominantly.
The predictions wound up being inaccurate, as Bitcoin futures saw huge rises without a few hours. As a consequence, prominent brokers started forbidding their clients from taking short positions. The general fear was that shorting Bitcoin futures could lead to investors getting “Ashdraked”.