Ashdraked

November 21, 2023 - Around 2 mins mins to read

Understanding Ashdraking

Ashdraking is a term that originated from the activities of Lord Ashdrake, a pseudonymous Romanian Bitcoin trader who gained fame in the mid-2010s.

Lord Ashdrake was known for his skepticism towards cryptocurrencies. He had a specific strategy of betting against BTC, also known as shorting, with the belief that the digital asset would decrease in value.

During the period between 2014 and 2015, when Bitcoin experienced significant losses and lost almost half of its value, Ashdrake achieved considerable success. He became a prominent advocate for traders to adopt short positions. However, when Bitcoin surpassed $300, Lord Ashdrake once again shorted the currency, but this time the market did not favor him.

The prices of Bitcoin rapidly rose, surpassing $500 and nearly reaching $600 just a few weeks after surpassing the $300 milestone. Despite this, Ashdrake stubbornly maintained an aggressively short position, which ultimately led to the loss of his entire invested capital. The concept of Ashdraking continues to be a concern for traders.

In 2017, the Chicago Board Options Exchange (CBOE) became the first major exchange to offer traders the opportunity to trade Bitcoin futures. This allowed them to place bets on the price of Bitcoin without actually holding any cryptocurrency themselves.

The launch of Bitcoin futures on the CBOE was considered a crucial test for the cryptocurrency. The mainstream financial press, which was generally skeptical of cryptocurrencies, strongly predicted that institutional investors would heavily take short positions.

Contrary to these predictions, the futures experienced significant increases within just a few hours. As a result, some prominent brokers completely prohibited their clients from taking short positions due to the fear of being “Ashdraked.” Lord Ashdrake, or someone claiming to be him, continues to be a prominent figure in the crypto community. In October 2020, he gave an extensive interview to blogger zoomerjd, discussing the infamous incident.