Ashdraked

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

In the world of cryptocurrencies, Lord Ashdrake was known for his unique approach to trading. He had a specific strategy of betting against Bitcoin, 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, encouraging them to bet against Bitcoin’s price movements. However, the market is unpredictable, and even the most experienced traders can face unexpected challenges.

When Bitcoin surpassed the $300 mark, Lord Ashdrake once again shorted the currency, anticipating that it would continue to decline. Unfortunately for him, the market did not favor his prediction. The prices of Bitcoin rapidly rose, surpassing $500 and nearly reaching $600 just a few weeks after surpassing the $300 milestone.

Ashdrake stubbornly maintained an aggressively short position, refusing to cut his losses and exit the trade. This stubbornness ultimately led to the loss of his entire invested capital. The concept of Ashdraking continues to be a concern for traders, reminding them of the risks associated with stubbornly holding on to a losing trade.

It’s worth noting that Lord Ashdrake’s trading experience is an example of the importance of having a well-thought-out trading strategy and being prepared to adapt it according to market conditions. While shorting can be a profitable trading strategy when executed at the right time, it is crucial to manage risk and cut losses when the market moves against you.

Fast forward to 2017, the Chicago Board Options Exchange (CBOE) became the first major exchange to offer traders the opportunity to trade Bitcoin futures. This new development provided traders with a way to speculate 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. They expected these investors to bet against Bitcoin’s success, mirroring Lord Ashdrake’s previous strategy.

Contrary to these predictions, the Bitcoin futures experienced significant increases within just a few hours of trading. This unexpected rise caught many traders off guard, including those who had planned to short the market. 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 cryptocurrency community. In October 2020, he gave an extensive interview to a blogger named zoomerjd, discussing the infamous incident and sharing his insights into the world of cryptocurrency trading.

While Ashdraking represents the negative consequences of stubbornly holding on to losing trades, it also serves as a cautionary tale for traders. It reminds us of the importance of staying informed, being adaptable, and managing risk in the volatile world of cryptocurrencies.