Derivatives businessman James Wynn came out of woodwork a few weeks ago, reflecting 9-figure Bitcoin positions on Hyperliquid as he went to a seemingly invincible running that ended with nearly $ 100 million worth of income.
But that running, just like the frequent case with high-leveraged crypto derivative trading, came to a surprisingly Wynn’s eligible ending his entire account despite the BTC only moving a few percent.
“I decided to give a rest to Perp trading,” Wynn wrote to X after the final explosion. “This is a happy ride. Approximately $ 4 million to $ 100 million and then back to a total account loss of $ 17.5 million.”
Wynn’s story is nothing new. In 2021, for example, the industry saw Alex Wice’s public rise – a poker player who became a businessman of derivatives – that Also lost $ 100 million After making a big bet with action. And even in 2017, in the days of the Bitmex Trollbox, The pseudonymous figures like steves and Theboot Used to brag about their 10s million -million income and loss before forever and ever faded into depth.
The problem with crypto derivatives
Cryptocurrency derivatives can be an incompetent -belief -useful tool; If an entrepreneur holds 500 BTC ($ 52 million) and believes the market will decrease, they can regulate their position by going to short – reducing exposure without having to sell their area assets, which in itself can cause slippage or front running.
A set of neutral Delta’s neutral techniques can also be used as the classic trading basis that has become popular among institutional traders in the Bitcoin CME Futures market, which involves at the same time going long and short to reap the funding rate as a harvest.
But issues are starting to form when crypto entrepreneurs, most of them inexperienced retail traders, use platforms that offer up to 100x action.
Imagine a newcomer has $ 5,000 in trade capital, sure, they can make some intraday trading and make $ 50 or $ 100 per trade, but if they use 100x they can make $ 50,000 per 10% move. This is the slippery slope of trading that gambling is encouraged to fall.
Data from Neutrading It is shown that only 3% of the merchants of the day earn and 1% are always done. And the game becomes more difficult at all, in this case, entrepreneurs are opening positions worth hundreds of millions of dollars.
James Wynn exists the casino
James Wynn’s collapse came to part because of his inability to deal with emotional trading swings, but also the sheer size of his positions.
Wynn often Post about getting slightly liquid and reopening the position at a worse break-even point. This indicates an entrepreneur out of his depth by over-leverage. As Wynn has used in some cases 40x seizure, his point of extermination has left no margin for mistakes, this means that businessmen or trade companies can hunt his point of extermination and force him to an impulsive trade.
Hyperliquid is a relatively liquid area of derivatives, it has a million -million in the depth of the market within 1% of the price of an asset but it does not have hundreds of -millions, which is required to obtain Wynn’s leveraged positions.
In fact, Wynn’s trade thesis is based around the event in Bitcoin Las Vegas and any potential announcements that can raise Bitcoin above a new high record. If this had happened, Wynn would have a hundred -millions of uncertain income, but unfortunately in his case, Bitcoin began to collapse at the conference as speeches from Michael Saylor and Ross Ulbricht failed to spark any momentum.
Wynn’s lack of volatility and pointless appetite to keep betting led to her chopped on the market. His losses became noteworthy that an entrepreneur decided to counter the trade in each position by going short at the same time as Wynn lings, this businessman made $ 17 million, according to Lookonchain.
While the day was finally placed on the journey of Wynn’s derivatives, he announced that he was “back to the trenches” to trade meme coins, of course.
