When $686 Million Vanishes in Five Days

$686 million. That's roughly the GDP of a small country, vanishing in the span of five trading days. The culprit wasn't a natural disaster or economic collapse—it was a single firm's bet on ether that went spectacularly wrong.

Trend Research, led by Liquid Capital founder Jack Yi, had spent months constructing what seemed like a bulletproof strategy. The firm built a $2 billion leveraged long position in ether by borrowing stablecoins against ETH collateral through DeFi platforms like Aave. It was a classic "looped position"—using ether to buy more ether, amplifying both potential gains and losses.

The Unraveling

The strategy worked beautifully during ether's climb. When ETH dipped below $4,000 in October, the team remained confident of a quick rebound. That confidence proved costly. Instead of bouncing back, ether continued its descent, creating a slow-motion disaster for the leveraged position.

The mathematics of leverage are unforgiving. As ether's price fell, the collateral backing their borrowed stablecoins shrank while their debt remained fixed. Each dollar drop in ETH price tightened the noose around their position.

The final blow came this month when ether crashed alongside bitcoin, hitting $1,750 on February 4th—its lowest level since April 2025. According to Arkham data, Trend Research was forced to liquidate over 332,000 ether tokens, sending them to Binance to repay mounting debts.

The Aftermath

The numbers tell a stark story. The firm that once controlled a $2 billion position now holds just 1.463 ETH. The estimated loss of $686 million represents one of the largest single-firm crypto losses in recent memory, rivaling the spectacular blowups of previous market cycles.

Jack Yi framed the massive sales as "risk control measures," maintaining his bullish outlook. "We remain optimistic about the performance of the new bull market: ETH reaching over $10,000, BTC exceeding $200,000," he posted on X. He called the current moment "the best time to buy tokens," describing volatility as crypto's defining characteristic.

Yet his optimism couldn't mask the harsh reality. The firm's rapid liquidation likely contributed to ether's downward pressure, creating a feedback loop that made their situation worse with each sale.

The Persistent Allure of Leverage

This incident underscores an uncomfortable truth about crypto markets: despite years of institutional adoption and regulatory progress, the fundamental dynamics of leveraged trading remain unchanged. The same loop strategies that destroyed traders in previous bear markets continue to attract new victims during each bull run.

The appeal is obvious. In a market where assets can double or triple in months, leverage promises to multiply those gains. But it also multiplies the pain when markets reverse. Trend Research's story echoes countless others—from Three Arrows Capital to individual traders who've learned this lesson the hard way.

What makes this case particularly striking is the scale and sophistication involved. This wasn't a retail trader getting liquidated on a $10,000 position. This was a professional firm with institutional backing, yet they fell into the same psychological trap that has claimed countless crypto fortunes.