This business week has not been kind to the leverage trading community, as liquidations in the last 24 hours have once again crossed the $300 million mark and caused several traders to experience “max pain.”
The recent wave of liquidations on major crypto trading platforms has left several well-known traders with staggering losses. According to data from Hyperdash and on-chain analytics firm Lookonchain, seven prominent traders dominating activity on derivatives exchange Hyperliquid have collectively lost $455 million in the last 8 months.
Machi Big Brother, Qwatio, James Wynn soaking in losses
Top of the list of names painted in red is Taiwanese-American tech entrepreneur Jeffrey Huang, popularly known as Machi Big Brother. Last Monday, Machi faced a partial liquidation and was left holding 835 ETH worth around $3.09 million in leveraged longs, with a liquidation price of $3,668.39.
Since Cryptopolitan covered the October 11 market crash that took away about $17 billion in long positions, Machi has added $1.73 million to sustain his positions. Monday’s downward momentum in ETH prices forced a full liquidation, reducing his account balance to just $16,77.
Machi had turned trading volatility into a winning streak, netting $44.8 million in profits. Now, data from Hyperdash shows that the figure has plunged to $15 million in total combined PnL. He reopened a 25x leveraged long worth $364,000 on 100 ETH, with a liquidation price of $3,546.43.
As of this reporting, that trade held an unrealized gain of just over $133,000, a rather mute figure compared to what he has lost.
James Wynn, who once held as much as $87 million in profit, sank to an all-time $21.9 million in losses, according to Hyperdash’s profit and loss tracker. Over the past two months, Wynn’s trading history has been marred by 45 liquidations, but he finally managed to turn a small corner this week with an unrealized profit of $66,465 on a BTC short bet.
Few traders wear the term “gambler” on the sleeve as diligently as Qwatio, who suffered heavy losses in September, only to return to Hyperliquid with a fresh wallet, depositing 4.22 million USDC to rebuild.
At the end of the last month in Q3, he opened short positions using BTC worth $150 million at 40x leverage and XRP valued at $7.7 million with 20x leverage. The trades counted for naught because the crypto market rebounded, wiping out over $1.2 million from his leverage trading portfolio.
Instead of cutting back, Qwatio closed his initial short positions on a $3.4 million loss, then re-entered the market with a 20x short on 6.17 million XRP at a liquidation price of $2.9155.
Per the gambler’s Hyperdash records, he made losses of $101,000 on BTC and $315,000 on XRP short leveraged bets between September 28 to October 1. Qwatio’s total sheddings went over $28.8 million, taking all his previous $26 million in profits down the drain.
Leverage traders lose over $100 million in market volatility
Machi Big Brother, James Wynn, and Qwatio are not the only ones sharing the spoils, as Lookonchain also identified four other unknown traders who suffered similar fates.
A trader named by the market tracking platform Aguila Trades led the Hyperliquid leaderboard with $41.7 million in profits, only to plunge to $37.6 million in losses as leveraged positions turned against him. Another trader, the “14-win-streak trader,” saw an even deeper profit-loss reversal, swinging from $33 million in profit to $30.2 million in losses.
The biggest loser overall per Lookonchain had a total realized loss exceeding $45.3 million, alongside a “low-stack degen” trader who had turned an initial stake of $125,000 into $43 million, only to end up losing $180,000 in the end.
Brett Harrison, the former president of FTX US, believes extreme leverage trading on volatile crypto assets is dangerous and irresponsible.
“I think it’s a major problem. It encourages people to blow out their accounts as fast as possible. The point of a derivatives exchange is to allow people to safely and securely, in a long-term fashion, establish open interest, not to try to blow out accounts and collect liquidation fees,” he surmised in a recent interview.
Want your project in front of crypto’s top minds? Feature it in our next industry report, where data meets impact.
Source: https://www.cryptopolitan.com/high-leverage-trading-cost-7-traders-fortune/
