👇This is BNBUP May 19, 2021.
A huge spread that reached several hundred percent. Having certain software and an understanding of how to collect the spread, you could earn a very large amount. And this was the case for almost all leveraged tokens (with the UP/DOWN prefix).
But let’s take things one step at a time: BTC had been threatening to break through the major level at 42k for several days at that time
And the breakthrough then exceeded all expectations: we not only broke through 40k, but also broke through 30k - and all this within one hour. There is wild volatility in the market, panic reigns on the alt and, apparently, leveraged tokens were not designed for such crypto jokes.
Briefly, what leverage tokens are: they are a derivative instrument from futures, with already built-in floating leverage and direction. For example, Down tokens grow when the original instrument falls.
But the most important detail here is that there are no real trades - we can conditionally say that this is an index - all the driving force is produced by bots - they make sure that the price of the token corresponds to the original + floating leverage.
And at that moment, when panic reigned on the original instruments - wild shots in both directions and all this with a fairly large spread - leverage tokens simply broke. The floating leverage became larger and larger, and the bots did not understand where the actual price of the coin was and painted pictures like this:
Of course, in the end, this was a one-time event of broken bots and Binance tightened the screws tightly enough to prevent this from happening again. In just an hour of trading, you could accumulate a fairly large amount, and at least for the sake of such situations on the exchange it is worth continuing to trade. 🫶
