Popular REKT Stories in the Cryptocurrency Trading Community

Rekt in one sentence could be summarised with Ripple:

Bought XRP at the tippy top in 2018 and rode that sweet train all the way down!

1. The Infamous Bitcoin Liquidation

A Chinese Bitcoin trader has allegedly committed suicide after he lost investor’s money in a highly leveraged trade position. According to 8btc, Hui Yi lost 2,000 Bitcoins after he entered a short position which was liquidated after it went in the opposite direction. The trader, who was the co-founder and CEO of cryptocurrency market analysis platform BTE.TOP, died on June 5.

At current prices, Yi lost nearly $16 million in one position. Yi had leveraged his position by 100 times and thereby magnifying his losses.

Yi’s death was revealed by an ex-partner as speculation was raised that the 2,000 Bitcoins had been embezzled from clients. Speculation has also been rife that Yi could have faked his death to avoid paying back his clients.

Why is leveraged bitcoin trading so appealing? It is easy to fall for the leveraged trading trap. This is because the size of a position is greatly increased using ‘someone else’s money’. In other words, a broker or an exchange lends you money to trade. But while it can be highly profitable if a trade goes your way, the losses are greatly magnified if the opposite happens.

This content is not available due to your privacy preferences. Update your settings here to see it. In Yi’s case, he was expecting Bitcoin’s price to fall and so allegedly entered a short position of 2,000 BTC. By employing 100x leverage, Yi was effectively trading with 200,000 Bitcoins! Consequently, Bitcoin only needed to go up 1 percent from the entry price for Yi to lose all the funds.

2. The Options Trading Mishap

The May Crash May 19th, 2021 saw Bitcoin collapse approximately 20% in the span of 45 minutes before retracing the entire crash in the following 2 hours. This move was the culmination of general weakness in the market due to the evaporation of spot buying, and the overexposure of the market to high beta assets with a lack of sidelined cash.

Over 3B of liquidations happened on Bitcoin futures products alone that day, not including liquidations across altcoin futures. The liquidations and speed of the market collapse that day threw the market into a frenzy, with a variety of dislocations.

3. The Altcoin Rollercoaster

With $1B worth of the second largest crypto exchange and leverage of $6B with its own crypto $FTT, it got rekt within two days.

The entire crypto space is under audit with a financial stress test, and it fails.

4. The Pump and Dump Scheme

Cryptocurrency markets can be influenced by various manipulative tactics, including pump and dump schemes. In a well-known REKT story, a trader fell victim to a pump and dump scheme orchestrated by a group of individuals. The trader invested in a coin that experienced a sudden surge in value, only to crash shortly afterward. This incident emphasizes the importance of skepticism and diligence while navigating the cryptocurrency landscape.

"I joined a pnd group and lost everything. The group is called XXX. It is a scam run by 2 people who make millions of dollars in profit off of mostly innocent people. You will never make gainz from it, you will only lose. DO NOT JOIN IT.""

Frequently Asked Questions

What does REKT mean in cryptocurrency?

REKT is a slang term used in the cryptocurrency community to describe a substantial financial loss resulting from trading or investing. It originated from the word 'wrecked,' signifying the severe impact of the loss on the individual's financial position.

How can traders avoid getting REKT in cryptocurrency trading?

Traders can mitigate the risk of getting REKT by practicing effective risk management strategies, such as setting stop-loss orders, diversifying their portfolios, and avoiding excessive leverage. Additionally, conducting thorough research, staying informed about market trends, and being cautious of suspicious schemes can help reduce the likelihood of significant losses.

Are there any success stories in cryptocurrency trading?

While there are stories of traders achieving significant profits in cryptocurrency trading, it is essential to approach such narratives with caution. Success stories often involve a mixture of skill, timing, and luck. It is crucial to recognize that the cryptocurrency market is highly volatile and can pose significant risks even to experienced traders.

What lessons can be learned from these REKT stories?

The REKT stories discussed in this article highlight the importance of risk management, thorough understanding of trading instruments, research, and skepticism. Traders should prioritize proper risk assessment, continuous learning, and staying informed about market dynamics to mitigate the chances of significant losses.