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The risky short bet was made in anticipation of Ethereum’s Pectra upgrade as Ether fell nearly 11% amid growing global trade concerns.
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An anonymous cryptocurrency trader has accumulated almost $68 million in unrealized profit by shorting Ether amid its recent price decline.
According to blockchain data from Hypurrscan, the trader opened a 50x leveraged short position when Ether (ETH) was trading at $3,176. As of 9:06 am UTC on March 5, the position had almost $68 million in unrealized profit.
Shorting involves “borrowing” the underlying cryptocurrency from a broker, selling it at the current price, and then repurchasing it once the price falls — a strategy used by traders to bet on the price decline of an asset.
Source: Hypurrscan
The trade involved shorting 70,131 ETH, worth more than $155 million at current prices. In addition to the unrealized gains, the trader also earned $3.2 million in funding fees. However, the position is at risk of liquidation if Ether’s price rises above $3,460.
ETH/USD, 1-month chart. Source: Cointelegraph
The lucrative short position came during a period of heightened volatility in the crypto market. The industry recently suffered its largest ever hack, with Bybit losing $1.4 billion, alongside broader macroeconomic factors, which saw Ether’s price decline nearly 11% over the past week, Cointelegraph Markets Pro data shows.
Related: Can Ether recover above $3K after Bybit’s massive $1.4B hack?
Ethereum’s Pectra upgrade may lay groundwork for next Ether price rally
The profitable short trade comes during an exciting period for Ethereum’s development, as the Pectra upgrade went live on its final testnet on March 5, Cointelegraph reported.
Ethereum’s forthcoming Pectra upgrade could lay the groundwork for the next Ether rally by helping ease long-term selling pressure, according to Gabriel Halm, a research analyst at blockchain intelligence firm IntoTheBlock:
“While Ethereum’s upcoming Pectra upgrade won’t necessarily trigger an instant price bump, it marks a significant step forward in the ongoing improvements to the Ethereum ecosystem.”
“By reducing consensus overhead and boosting L2 scalability, it will expand the network’s overall capacity, thereby enhancing its competitive edge,” added the analyst.
Ethereum Improvement Proposal (EIP)-7251 will increase the validator staking limit from 32 ETH to 2,048 ETH, making it easier for validators to compound their earnings, potentially reducing sell pressure over time.
Related: Memecoins: From social experiment to retail ‘value extraction’ tools
However, the upgrade was activated on the Holesky testnet on Feb. 24 and failed to finalize. This may mean Ethereum developers will further delay the mainnet launch as they investigate the issues.
Investors expect more information on the final date of the Pectra mainnet implementation on March 6 during Ethereum’s All Core Developers call.
Magazine: Ethereum L2s will be interoperable ‘within months’: Complete guide
This article first appeared at Cointelegraph.com News
