A significant player in the cryptocurrency market, often referred to as a Bitcoin whale, has re-entered with a substantial short position valued at $235 million. This move reflects a growing sentiment among some large investors who are bracing for further downturns in the crypto market, particularly against the backdrop of tariff concerns and a looming government shutdown.
The investor, who has a portfolio reportedly worth $11 billion, opted for a 10-times leveraged short position on Bitcoin (BTC). This strategy essentially bets on a decline in the price of Bitcoin, which was trading at approximately $111,190 at the time the position was taken on Monday. Currently, the whale is grappling with an unrealized loss of about $2.6 million on this bet, which could lead to liquidation if Bitcoin’s price exceeds $112,368, as indicated by data from Hypurrscan.
This recent short position follows a lucrative week for the investor, who previously netted around $200 million during a recent crypto market downturn. The same whale had employed a comparable leveraged short strategy leading to that profit. In trading, leverage allows investors to control larger positions than their actual capital would permit, amplifying both potential gains and inherent risks.
Blockchain data platform Arkham highlighted the investor’s latest moves, noting that the whale has also rerouted approximately $30 million to Hyperliquid and opened another short position. Additionally, over the past week, he transferred $540 million in Bitcoin to new wallets, with $220 million directed to wallets on the Coinbase exchange.
This particular Bitcoin whale first emerged on the scene two months ago, previously rotating about $5 billion worth of Bitcoin into Ether (ETH). This maneuver briefly positioned him ahead of Sharplink, a prominent corporate treasury holder, in total ETH holdings, as reported in early September.
Market analysts have pointed to large-scale sell-offs from dormant Bitcoin whales as a major factor contributing to the stagnation in Bitcoin’s price action throughout August. Furthermore, following the latest market turmoil, new Bitcoin whales are experiencing significant unrealized losses, totaling over $6.95 billion. This downturn saw Bitcoin values dip below the critical $113,000 mark, leading to the largest unrealized losses among this group since October 2023.
Despite the apparent decline in investor sentiment, analysts have noted that Bitcoin’s recent drop to $104,000 may serve as a healthy correction, eliminating excess leverage in the market. A more conservative approach from traders appears to be emerging as the short-term supply of Bitcoin holders rises, coupled with a increase in speculative capital within the market, according to a report from blockchain analytics firm Glassnode.
