Be cautious with Bybit and OMG this week

For those that don’t know. OMG is having an airdrop on Nov 12. So as a resort people are hedging their airdrop. Basically buying on spot and shorting the futures and derivatives.

What has happened in the last week is crazy. Everyday the funding rates go lower and lower. Now the funding rates are -2% and climbing. Meaning you get paid 2% daily to go long. And there is no end in sight for the funding. Go to coinglass.com and look at the funding chart.

Now what is happening is that the market makers are not working on Bybit and the price there is currently $14 while the mark price is $16.5. Basically 20% difference. This is nuts.

So people got positions open which are over >100% loss and they are not liquidated since the mark price is higher. So what will happen is peoples losses will be larger than their account balance and the insurance fund will need to cover the difference. And the insurance fund might get emptied in the processes. And if that happens then there will be major issues.

So if you want to buy OMG only do it on spot and no margin or futures and careful using Bybit until this situation is under control, we don’t want the insurance to be depleted.