The story of the $OM token is a perfect example of why liquidity matters more than market cap in crypto.
You initially invested $1M when OM was priced at $0.20, getting a significant amount of tokens. As the price climbed to $2, your holdings became worth $10M. Instead of selling (which would’ve been difficult due to low liquidity), you used your tokens as collateral to borrow $5M USDT — a smart risk-managed move.
Later, as OM’s price reached $9, your holdings were valued at $45M, allowing you to borrow up to $22.5M in total. The danger was clear: if OM dropped to $4.5, your position would be liquidated. But here’s the catch — OM’s liquidity was low, so even a small sell order could move the price drastically.
On a quiet Sunday, someone saw this opportunity. They opened a short position on one exchange and began selling OM on another, triggering a sharp price drop. This started a liquidation cascade — once OM hit $4.5, many leveraged positions were force-sold, further driving down the price. In a short time, OM crashed over 90%.
Meanwhile, the OM team had earlier sold tokens OTC at a discount and used that USDT to slowly buy back OM on exchanges, manipulating price upward due to the thin liquidity. With just a few million in buy pressure, they pushed the token price up significantly and inflated the market cap.
This entire cycle shows how market cap can be deceiving, especially when liquidity is low. A token may look huge on paper, but you might not be able to exit without crashing the price. In crypto, liquidity is real power — market cap is often just an illusion.
