Even after the crash of UST and Luna then came the classic versions of these cryptocurriences surprisingly it can still do harm to investors who thought could make a quick buck.
Short Squeeze
A Korean startup called Uprise recently took an interest in LUNAC to earn a profit however it backfired in dramatic fashion. Take note this action Uprise performed is no the back of what is already more than a 99% drop in LUNAC. Essentially you would think with this much drop in value it could not get any worse, or could it?
Early July Uprise went in on a short on LUNAC thinking the crypto would potentially be worth less after a recent +1,000% pump. However due to the price volatility Uprise lost $20 million in their position and ended up losing 99% of its client's money. Add salt to the wound they themselves lost $3 million.
“Due to great unexpected volatility in the market, there has been damage to customer assets. We plan to finalize the report on our virtual asset business soon.”
Uprise is planning to created some form of compensation to its investors but honestly if government can't print money out of thin air I do not know how Uprise can give compensation.
Conclusions
If there is a way to make a quick buck many would want to utilize that option. However some fail to determine the actual risk on the option and invest in it thinking they can be fast enough to avoid catastrophe. Uprise has created an example for us to learn from and to not believe there is always easy way to make a quick buck.
In a matter of days the company destroyed what ever capital they had and hinder their progress in expanding. It is likely set on a path to failure since it did not calculate its own risks properly. I am a bit surprise than an entity with multiple employees and likely a decent amount of funding would misjudge the degree of risk they were facing when they put on such trades.
None of what I write is financial advice. It is for entertainment purposes only. Thanks for reading!
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