It doesn’t take a genius to work out that the price of Dogecoin might be on the brink of experiencing one hell of a slump. The price was riding high for the week and was seeing unprecedented gains to the joy of many and the dismay of others.
Shorting is effectively gambling as you are betting on a moment in time supposed to the long-term view of a project but some influential businessmen with the bankroll to fund it are now using social media to show off their very profitable decision.
For those who don’t know shorting is when you are betting on the price of a stock or in this case cryptocurrency to go down supposed to up. It is also common to use leverage on such a trade meaning that you can multiply the amount of money you can make. You can also multiply the money you lose of course. Using these strategies is very risky and can only really be advised for people who don’t mind taking a risk with significant bankrolls.
The CEO of Digital Currency Group, Barry Silbert, a multinational company that owns grayscale announced that he bet $1 million on the downfall of Dogecoin.
Around this time Silbert sent out this tweet, Doge was experiencing all-time highs but in the space of 12 hours, the price fell to as low as 43 cents. In his short, it was revealed that he was using 3X leverage which made his profits particularly attractive. Silbert justified his bet by saying that if he was wrong and the price of Doge reached $1, he would donate to a charity that the DOGE holders recommend and if he’s right he obviously becomes the benefactor of his decision.
He also believes that the demise of Dogecoin will temporarily bring down the rest of the market, (Bitcoin included). Today did see quite a sell-off at about 5 pm U.S time but this was to be expected considering the run we have been on and the markets have since recovered.