Crypto whale opens $12.3M 20x leveraged short on silver via Hyperliquid

One crypto whale has adopted a strategy of shorting silver, using Hyperliquid’s HIP-3 infrastructure. The strategy, usually reserved for mainstream finance, has shown silver’s usage in place of crypto assets. 

A whale has opened a leveraged short position on silver, at one point carrying over $2M in unrealized gains on Hyperliquid. Silver became one of the hottest assets on HIP-3, as its tokenized version reflected the volatility on traditional markets. 

The whale’s known address holds a 20X leveraged position on silver, with a notional value of over $12.34M. The unrealized gains fluctuated between $2.02M and $1.86M, as silver was still facing disparate pressures. 

Shorting silver is also the unpopular position, meaning the trader also received $13K in funding fees. The position’s liquidation point is at $107.96, while silver traded at $83.67. The whale entered the market at $96, catching the most recent slide. 

The trader also has a known wallet with $5.24M sitting in USDC to be used as potential liquidity. Previously, the silver trader with the 0x007 wallet also took positions in HYPE tokens. 

Why are traders shorting silver?

Crypto traders treated silver as an experimental asset, which was only offered recently through XYZ on Hyperliquid. Silver is much safer to short compared to digital coins and tokens, which can be pumped more easily to liquidate positions. Even coins with years-long downtrends and relatively safe shorting have erased their losses and liquidated the positions. 

Silver, on the other hand, has normalized after breaking up its recent rally. With significant physical reserves held, a short squeeze on silver is much less likely. 

This leaves crypto traders with an asset potentially more viable for a short position, with lower volatility compared to altcoins. Silver traders on HIP-3 were also liquidated during the initial hike above $120, but new attempts at shorting returned as silver established a safer range. 

Silver is no longer the top-traded asset on HIP-3, but it remains in the top 5. Gold has returned as the top asset, while commodities make the most actively traded category on the HIP-3 platform. 

Is Jane Street also active in the silver market?

As silver crashed from its peak, traditional markets looked around to see if any significant players had an interest in shorting silver. The precious metal has a significant paper market, allowing for strong directional speculation.

Rumors have appeared that Jane Street may be manipulating the price of silver and benefiting from volatility. Jane Street is the world’s biggest holder of BlackRock silver trust shares for physical metal exposure, while also trading options to benefit from volatility. 

Jane Street’s physical silver is held by J.P. Morgan, meaning the trading company has enough leeway for riskier positions. The potential to short silver remains significant, allowing crypto traders to copy-trade and short the asset with higher confidence. 

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