Crypto Trader's $19.85 Bet Turns into $3963 Loss on ByBit

A recent incident involving a crypto trader on X has sparked discussion about the risks of short-selling in cryptocurrency markets.

The trader, who goes by the name 'Meekdonald,' attempted to short-sell the DAO token RAVE at its peak price of $19.85 using ByBit's perpetual futures contracts with 12x leverage.

However, despite the token's price falling below his predicted value of $14.70, the cumulative funding payments on the contract overwhelmed his unrealized profit, resulting in a loss of 3,963%.

The high funding rates were due to the token's rally being described as a 'coordinated scheme' to lure and liquidate short sellers, with three wallets holding approximately 90% of the token's total supply.