How This Hyperliquid Trader Lost $25.8 Million?

Bitcoin (BTC) surged to a new all-time high today, and the other coins also saw major gains. This highlighted a stark contrast in the crypto market, with some reaping massive profits and others facing devastating losses. 

Among the latter is trader Qwatio, a Hyperliquid whale, whose aggressive short positions have nearly erased his profits, leaving him with a staggering loss of $25.8 million.

In a recent X (formerly Twitter) post, blockchain analytics firm Lookonchain highlighted that after losing 16.28 million USDC, Qwatio deposited another 10 million USDC on Hyperliquid to double down with leveraged shorts.

However, shorting during a market rally, amplified by leverage, proved catastrophic for the trader. According to the latest data, his short positions worth $334 million were liquidated within just three hours.

The latest liquidation involved 1,743 Bitcoin worth $211 million, 33,743 Ethereum (ETH) worth $102.3 million, and 15 million Fartcoin (FARTCOIN) worth $20.6 million. The trader’s wallet, identified as 0x916E, now reflects a total loss of $25.8 million. 

“His previous $26 million profit has now been almost entirely wiped out by two short trades,” EmberCN wrote.

This incident echoes the recent downfall of high-profile trader James Wynn. Wynn, another high-leverage trader known for bold bets on Hyperliquid, has exited the spotlight. 

Following losses in the nine-digit range, Wynn deactivated his X account. This trend of high-risk trading failures highlights the volatility of leveraged positions in a rising market.

“All his wallets and Hyperliquid balance combined are down to just $10,176,” Lookonchain posted.

Meanwhile, not all traders were rekt by the market’s rally. Some saw significant gains from their positions. Aguila Trades went long on Bitcoin and earned $2.3 million in profits.

“From a loss of $35 million to a profit of $2.3 million, what a legend! Aguila Trades has fully recovered his $35 million losses and is now sitting on over $2.3 million in profits,” the blockchain analytics firm revealed.

While leveraged trading carries significant risks and can lead to unpredictable outcomes, a strategy that has proved favorable lately is HODLing. For example, Bitcoin’s record high has significantly increased the wealth of long-term holders, particularly the pseudonymous creator, Satoshi Nakamoto. 

With an estimated $133 billion in Bitcoin holdings, Nakamoto is now the 11th richest person in the world.

“Bitcoin could actually produce the first anonymous richest person in the world. Satoshi Nakamoto would surpass Elon Musk’s current net worth if Bitcoin hits $370,000,” The Kobeissi Letter posted.

Therefore, the recent market rally really highlights the ups and downs of crypto trading. While traders like Qwatio faced massive losses, long-term holders, including Satoshi Nakamoto, landed them on the global wealth list. 

This continues to fuel the debate in the crypto space: whether high-leverage strategies or a patient, HODLing approach ultimately leads to the greatest success.