Bitcoin News Update: Whale's $28.7 Million Profit Highlights Leverage Issues in Crypto

A major investor recently placed a substantial short bet on

, earning $28.7 million as the cryptocurrency market experienced a significant downturn. This individual used 20x leverage to short 1,232 , profiting from Bitcoin’s steep drop from its October high of $126,000 to below $90,000—a 29% decrease. This event underscores the increasing impact of leveraged trades in the digital asset space, where bold strategies can greatly magnify both profits and losses .

Recent volatility in Bitcoin has been fueled by a mix of global economic challenges and the effects of leveraged trading. In the past month, investors worldwide have withdrawn $2.9 billion from cryptocurrency ETFs, marking the largest recorded outflows. The leading crypto ETF, iShares Bitcoin Trust, saw $1.2 billion leave in just the first 17 days of November. This wave of withdrawals has paralleled a broader Bitcoin selloff, which

.

The downturn has been intensified by leveraged trades and forced liquidations. On October 10, a so-called "black Friday" for crypto markets resulted in over $19 billion being liquidated after the Federal Reserve’s unclear position on rate cuts unsettled investors. The prevalence of high-leverage trades—ranging from 20x to 100x—has made the market extremely reactive to price changes. For example, one trader

on HyperLiquid in less than an hour, only to follow up with another $115 million in short bets. These rapid-fire liquidations have sped up Bitcoin’s losses, in a matter of weeks.

Institutional leverage has made the situation even more severe. Trading venues such as

and Cboe now offer perpetual futures and long-term derivatives, letting traders take on larger positions with relatively little collateral. Wintermute, a key market maker, observes that hedge funds and proprietary traders are increasingly turning to structured derivatives to speculate on crypto. At the same time, crypto lending has ballooned to $74 billion in outstanding loans, a resurgence in high-yield deposit products.

The relationship between leveraged trading and systemic risk is also apparent in crypto-related stocks. Firms like Strategy (previously MicroStrategy) and BitMine Immersion Technologies have fared worse than Bitcoin’s 13% monthly drop, reflecting their exposure to leverage through treasury assets.

cautions that emotionally driven "revenge trading" during turbulent times can deepen losses, as demonstrated by a $553 million liquidation event where 82.54% of forced Bitcoin closures were long positions.

Analysts warn that leveraged positions are especially vulnerable in markets with limited liquidity. With Bitcoin trading near $91,000, the threat of additional liquidations remains unless there is a broader improvement in economic conditions.

that large holders have been selling at rates not seen since 2021, with the number of wallets holding more than 1,000 BTC dropping from 1,500 in November 2024 to 1,300 by October 2025.