In the aftermath of a tumultuous period in the cryptocurrency market, investigations are underway following a staggering $1 billion short position executed just prior to a significant market downturn. Binance founder Changpeng “CZ” Zhao has publicly called for clarification on the legitimacy of claims regarding this mysterious trader, who purportedly made the move on the decentralized trading platform Hyperliquid right before a notable crash. Zhao expressed skepticism on social media, encouraging others to verify the information: “Not sure of validity. Hope someone can cross-check.”
The numbers tell a staggering tale: within 24 hours, over $19.33 billion in leveraged positions were liquidated as approximately 1.66 million traders faced devastating losses. Among the hardest hit were major cryptocurrencies such as Bitcoin, Ethereum, and Solana. Hyperliquid reported a record liquidation, specifically an ETH-USDT trade valued at $203.36 million. Furthermore, independent researcher Mlmabc estimates that incurred losses might actually reach $30–40 billion, dwarfing official figures.
Liquidations predominantly stemmed from long positions, amounting to $16.83 billion, while short positions totaled $2.49 billion. Bitcoin registered the most significant losses at $5.38 billion, followed by Ethereum at $4.43 billion, Solana at $2.01 billion, and XRP at $708 million.
Adding intrigue to the situation, crypto investigator Coffeezilla highlighted the striking timing of the whale’s trades. The final short position was placed at 20:49 GMT, just one minute before former President Donald Trump’s tweet threatening new tariffs against China, which triggered an immediate dropdown across risk markets including cryptocurrencies. This synchronicity has led some, including Coffeezilla, to question the nature of this trader’s luck and strategy.
The fallout was severe for numerous traders on Hyperliquid, with more than 1,000 wallets completely wiped out and over 6,300 accounts suffering substantial losses, totaling $1.23 billion. Among those impacted, 205 wallets faced losses exceeding $1 million each, while over 1,000 users incurred losses surpassing $100,000.
In a further twist, investigator Eye traced potential connections of the so-called “Hyperliquid whale” to a complex network of Bitcoin and Ethereum wallets, indicating links to Garrett Jin—the former CEO of BitForex accused of mismanagement and missing funds. Reports suggest Jin’s extensive cryptocurrency history includes roles at Huobi and various staking platforms. His wallets reportedly hold substantial amounts of Bitcoin and Ethereum, many of which could be tied back to earlier ventures.
Despite this massive sell-off, there are mixed opinions about the market’s trajectory. Some analysts, such as Bitmine Chairman Tom Lee, consider the crash a correction after a 36% rally since April, suggesting volatility may indicate a potential bottom. Lee’s bullish outlook hinges on three main factors: artificial intelligence integration, institutional adoption of blockchain technology, and supportive Federal Reserve policies.
The dramatic events have reignited discussions about transparency and fairness within the cryptocurrency markets. The intriguing circumstances surrounding the Hyperliquid short raise alarms regarding the concentration of influence in this ecosystem and the unexpected advantages some traders might possess.
As traders reassess their strategies in the aftermath, many are turning to tools like sniper bots for quick execution and decision-making, crucial for navigating today’s unpredictable market. One emerging tool, Snorter Bot, capitalizes on this need by integrating seamlessly with Telegram and offering features designed for speed and efficiency in trading.
The highly volatile environment remains a double-edged sword: while it presents opportunities for profit, it also risks financial ruin for many participants. As the landscape continues to evolve, traders are left grappling with the lessons of recent days.
