Shiba Inu carnage: Traders lose $46.5 million on first day of SHIB futures
In a scene reminiscent of the early days of Bitcoin, the virtual currency known as SHIBE has been on a wild roller coaster ride over the last few days. While it’s up from its initial price (0.000001 BTC per coin), the market is incredibly volatile. The official currency of the Shiba Inu meme has had wild swings in value over the last few weeks. This week, in what some are calling an “unprecedented” move, trading of the cryptocurrency was suspended by order of the SEC. While no one knows what will happen next to the currency, some insiders are convinced the bubble is about to burst.
Shiba Inu are a popular dog breed that originated in Japan. While they are typically associated with a quiet demeanor, they are known for their playful nature and are frequently used as internet memes. This playful nature has led to the Shiba Inu being adopted by cryptocurrency traders as a mascot for the movement. The cryptocurrency Shiba Inu (SHIB) is named after the dog breed and was created to parody the high-risk high-reward world of cryptocurrencies.
Shiba Inu (SHIB), a meme currency launched to compete with Dogecoin in 2020, rose to the top 20 market cap yesterday after hype generated by TikTok and social media, according to data. Traders, however, have lost millions of dollars in futures contracts on this currency.
Investors in SHIB, both recently and last week, seem to have made good progress. The token is up 1,720% in the past week, 2,428% in the past two weeks and 36,060.9% in the past month alone.
This means that an investment of just $100 would be worth $1,720, $2,428 and $36,090 respectively. However, not everyone makes a profit. Some lose, and they lose a lot.
Futures traders – futures are a financial instrument that tracks the price of an underlying asset – lost more than 1.34 trillion SHIB trades in the past 24 hours alone, according to data from market tool Bybt.
They were liquidated, i.e. their positions were automatically closed when prices reached a predetermined price level, as traders raised funds above their capital base to place large bets on SHIB price movements.
The amount lost is $40 million. As you can see from the image below, the cryptocurrency exchange OKEx, where SHIB futures were listed yesterday, saw liquidations of about $40 million. Of this amount, $25 million was held by traders who were long (or betting on rising prices) and the rest were short (betting on falling prices).
On Binance, where the 1000SHIB perpetuals are listed (for simplicity, each perp represents 1000 SHIBs), the sell-off was $6.5 million, of which $3 million was long and $3.54 million was short.
Shiba, which did not exist. Image: BybtShiba
For example, the Shiba Inu token itself has been fluctuating in a narrow price range since yesterday, shortly after several exchanges launched SHIB futures contracts.
Shiba Inu what?
SHIB, a project token that promises to go to the moon, has a tradable bid of $394,796.00, a market value of $12 billion (higher than many well-known decentralized financial protocols) and a fully diluted market value of $31 billion.
Last day’s trading volume – on both decentralized and centralized exchanges – exceeded $14 billion, making SHIB one of the most traded cryptocurrencies on Tuesday. Attraction? Maybe it’s the fact that Memcoins are running on TikTok while enthusiasts are looking for the next Dogecoin.
Siba Inu traders are not the only ones who have suffered large losses on Memcoins. Traders in futures contracts on Dogecoin, the world’s fifth largest cryptocurrency, liquidated $105 million ($208.67 million DOGE), joining a broader market that saw more than $1.74 billion liquidated.
Gaining an advantage in the crypto asset market
As a paying member of Edge, you have access to a deeper understanding of cryptocurrencies and context in each article.