What Does Ashdrake Mean in Crypto?

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By Connor
Estimated reading: 3mins

At this point, the crypto industry is complete with its own lore.

Within this rich history, one thing is certain: crypto is not short on fascinating memes and stories.

In fact, one of these stories even involves Bitcoin being shorted.

This led to the birth of a new phrase: getting ‘Ashdraked.’

Here’s what it means.

What does ‘Ashdraked’ Mean?

Getting ‘Ashdraked’ refers to a trader losing all of their capital.

This term relates directly to a loss experienced by a trader who infamously shorted Bitcoin (BTC). 

Shorting is the process by which an investor can effectively bet against the price of an asset. If the asset’s price falls by a certain point in time, the investor gains profit.

The origin of getting Ashdraked traces back to a Bitcoin trader based in Romania, who used the name “Lord Ashdrake” online. 

As a noted Bitcoin skeptic who expected BTC to lose its value, Lord Ashdrake shorted BTC. 

While this initially resulted in gains at a time when Bitcoin’s price was falling between 2014 and 2015, it ended in a massive loss as the price of BTC rose.

As a result, Lord Ashdrake is said to have lost all of his capital. Thus, he became the first person to ever get ‘Ashdraked’ and created a cautionary tale for future shorters.

The Problem With Shorting Bitcoin

So where did Lord Ashdrake go wrong?

While shorting stocks is an incredibly popular investment method in traditional finance, applying this strategy to crypto has significant baggage.

Let’s do some quick math to explore why shorting may not be as robust as other investment strategies in the crypto landscape.

Imagine that you were to short a cryptocurrency that later plummeted 99% in value, from $10,000 all the way down to $10. 

If you shorted this position, you’d make a 99% gain

While this sounds amazing, for the amount of risk that you would have to take on, other positions would likely offer you a better bang for your buck.

For instance, taking the opposite position by buying crypto in a spot trade at $10 and eventually selling at $10,000 would result in a 10,000% gain

In other words, buying long can have a far greater upside when an asset’s price rises than shorting does when an asset’s price falls. 

In addition, shorting crypto can come with risks like getting Ashdraked, which threaten to take your entire position down to zero.

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Disclaimer:Please note that nothing on this website constitutes financial advice. Whilst every effort has been made to ensure that the information provided on this website is accurate, individuals must not rely on this information to make a financial or investment decision. Before making any decision, we strongly recommend you consult a qualified professional who should take into account your specific investment objectives, financial situation and individual needs.

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Connor is a US-based digital marketer and writer. He has a diverse military and academic background, but developed a passion over the years for blockchain and DeFi because of their potential to provide censorship resistance and financial freedom. Connor is dedicated to educating and inspiring others in the space, and is an active member and investor in the Ethereum, Hex, and PulseChain communities.

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