Pseudonymous trader who goes by @DefiSquared, the most successful trader on the Bybit exchange and the top wallet of DeBank, shared the story of one insane opportunity that happened today amid the cryptocurrency carnage.
Top trader made "millions" purchasing XRP positions with 45% discount
Trader @DefiSquared managed to make "seven figures" thanks to a mysterious imbalance in XRP pairs on Bybit. Today, Aug. 18, 2023, the prices between coin-margined and USDT-margined XRP-based derivatives on Bybit were trading with 45% difference. This created an amazing arbitrage opportunity explored by the trader.
For anyone curious, the arb today was between the XRPUSD and XRPUSDT contracts on Bybit. A 45% discount occurred that closed after 10-20 minutes.— DeFi^2 (@DefiSquared) August 18, 2023
Most likely, algo market makers ran out of spot XRP needed for the coin margined contract amidst the large liquidations that occurred https://t.co/58RI9y1IHs pic.twitter.com/CpEiPFwAPQ
The dicsount "window" only lasted for 10-20 minutes. It might have happened due to large and unpredictable liquidations of XRP traders' positions.
As explained by the trader, algorithmically backed market-makers faced a shortage of spot XRP cryptocurrency needed for coin-margined derivatives trading.
Their colleagues who were trading USDT-margined contracts were not affected by the issue.
Just like all major altcoins, XRP is badly affected by the ongoing panic-driven sell-off. In almost no time, the token plunged from $0.57 to $0.47, losing over 17.5% of its value.
Bybit exceeds Binance by XRP liquidations amid collapse
The collapse was surrounded by record-breaking liquidations on cryptocurrency markets. In total, 175,252 traders were liquidated in the last 24 hours, while the aggregated losses eclipsed $1.04 billion in equivalent.
When it comes to XRP, the total volume of liquidations is estimated at $27.92 million; almost 90% of this sum were the long positions of XRP bulls.
Out of this whopping amount, Bybit is responsible for $7.8 million, while Binance (BNB), the largest cryptocurrency exchange globally, is in charge for $7.4 million in equivalent.
The net market capitalization of crypto markets dropped by 6% overnight.