A cryptocurrency whale has reportedly lost up to $7 million in the Frax Share (FXS) altcoin, the management token of Frax Protocol, a decentralized stablecoin project.
Whale has sold 398.7k FXS tokens in the past two days for 2.43 million USDC, a US dollar-pegged stablecoin.
FXS Whale Sells Its Altcoins at Big Loss
According to data from Etherscan, a blockchain researcher for Ethereum, the whale's average selling price was $6.1 per FXS token, which represents a 74.7% reduction from the whale's average purchase price of $24.1 in late 2021 and early 2022.
Whale collected FXS tokens while the token was still popular in its early stages and hit an all-time high of $33.8 on January 9, 2022.
However, the whale apparently made a series of bad decisions that resulted in its great loss. Instead of buying low and selling high, the whale in question bought the FXS token every time the price rose or peaked. Whale also missed an opportunity to cut losses when FXS recovered in April 2022, but opted to provide liquidity and stake to Frax Protocol, hoping for even higher prices.
Sadly for Whale, FXS failed to rebound and its value continued to drop, dropping to as low as $4.8 on May 11, 2023. The whale finally lost hope and sold all of its FXS tokens at a huge loss.
This case illustrates the risks and challenges of investing in cryptocurrencies, particularly new and experimental projects that do not have a proven track record or strong community support.
*Not investment advice.