Key Points:
This move by Egorov comes as a smart strategy to protect himself against the high volatility of the cryptocurrency market.
Egorov began borrowing stablecoins on Aave in April, with $37 million worth of tether (USDT) being sent to crypto exchange Bitfinex whilst $51 million in USDC was sent to prominent market maker Wintermute, according to blockchain sleuth Lookonchain. These stablecoins were then used to trade in the cryptocurrency market.
The wallet belonging to Egorov has supplied a total of $188 million in collateral on Aave, with $64.2 million in USDT being borrowed in an open position, according to Debank. The open position currently has a health rate of 1.68, the collateral will be automatically liquidated if it drops below 1.00. This means that Egorov has to keep a close watch on the market and be ready to take action if the health rate drops.
CRV is currently trading at $0.65 having dropped by 2.1% in the past 24-hours, it slumped by more than 17% in a sudden move in the early hours of Saturday morning. This sudden drop in price is an indication of the high volatility of the cryptocurrency market. If the price of CRV is to continue to slide over the coming months, the value of collateral and thus the health rate will also suffer. This could lead to a potential loss for Egorov.
Despite the risks, Egorov seems confident in his strategy. CRV is 90% lower than its 2022 all-time high of $6.50, but Egorov believes that the cryptocurrency market is still in its early stages and that there is potential for growth. By depositing more collateral, Egorov is betting on the long-term potential of the cryptocurrency market.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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