Today, the crypto market is witnessing a strong surge as Bitcoin skyrockets to a new all-time high, leading to significant growth in many other coins. However, this reflects a starkly contrasting picture: While some traders are reaping enormous profits, many others are facing considerable losses, even reaching millions of dollars.
One of the prime examples of this extreme volatility is the story of Qwatio, a trader well-known in the Hyperliquid community and considered a 'whale' of this trading platform. Although he has recorded large profits in the past, Qwatio is now facing a dismal failure after nearly all of his Short positions were wiped out, leading to a loss of up to $25.8 million.
Leverage and Qwatio's failure
According to data from blockchain analytics firm Lookonchain, Qwatio once suffered a loss of 16.28 million USDC and then decided to deposit an additional 10 million USDC into Hyperliquid to increase leverage for his Short positions. However, betting on a market downturn while Bitcoin's price continues to rise had serious consequences. In just three short hours, all of his $334 million Short positions were liquidated, resulting in a massive loss.
Specifically, the liquidated positions include 1,743 BTC worth approximately $211 million, 33,743 ETH worth $102.3 million, and several other coins like FARTCOIN worth $20.6 million. Qwatio's wallet, with the address 0x916E, currently records total losses of up to $25.8 million, nearly wiping out the $26 million profit he had previously. This story reminds many of James Wynn, another high-leverage trader who suffered a loss of millions and decided to step away from the cryptocurrency world.
Valuable lessons
Although leverage strategies can yield enormous profits when the market moves in the right direction, they also contain unpredictable risks. Trading with leverage in a bullish market can quickly turn into a disaster, as was the case with Qwatio. Especially in a highly volatile cryptocurrency market, these strategies are even more likely to lead to failure.
The story of trader Aguila Trades presents a completely opposite signal. After suffering a loss of up to $35 million, Aguila persevered with the HODLing strategy and ultimately garnered a profit of $2.3 million from his position. This shows that, in some situations, patience and steadfastness can yield unexpected results, rather than constantly 'surfing' or using high leverage.
HODLing: The strategy of putting Satoshi Nakamoto on the list of the world's richest people
While some traders accept high risks, another strategy has proven effective over time: HODLing – the act of holding Bitcoin and other cryptocurrencies long-term without selling, regardless of market fluctuations. One of the prime examples is Satoshi Nakamoto, the anonymous founder of Bitcoin. With an estimated Bitcoin worth up to $133 billion, Nakamoto currently ranks as the 11th richest person in the world.
According to a report from The Kobeissi Letter, if the price of Bitcoin reaches $370,000, Nakamoto's asset value will surpass that of Elon Musk, making him the richest person in the world. This once again affirms the long-term potential of Bitcoin and raises the question of whether the patient strategies of HODLers truly yield superior benefits compared to leverage strategies or risky 'swing trading.'
The current situation in the cryptocurrency market shows a stark contrast. While patient individuals like Satoshi Nakamoto are enjoying substantial gains from Bitcoin's growth, risky traders like Qwatio are facing massive losses. This market is truly not for those who lack patience and a clear strategy.
The debate over whether leverage or HODLing will be the optimal long-term strategy continues to be an unanswered question. However, one thing is certain: the crypto market is not short of lessons, and every trader, whether a whale or a beginner, must carefully consider before making their decisions.