Crypto Trader James Wynn Loses $25 Million in Bitcoin Bet

Crypto trader James Wynn, renowned for his high-stakes leveraged trades, recently incurred a substantial loss of $25 million on a Bitcoin bet. This event, referred to as "The Matrix attack" by the crypto community, was closely monitored on-chain and stands as one of the most dramatic collapses in the crypto trading arena. Wynn's portfolio had previously surged from approximately $4 million to a peak valuation near $100 million, but a series of leveraged Bitcoin trades led to his swift decline.

Wynn's ascent to prominence began with flipping high-leverage perpetual contracts on the decentralized exchange Hyperliquid. On May 21, he initiated an $830 million long position on Bitcoin, followed by an additional $1.1 billion shortly thereafter. At one point, his unrealized profits neared $40 million. However, a shift in market sentiment, triggered by an unexpected U.S. tariff announcement, caused Bitcoin's price to drop sharply. This market movement proved disastrous for Wynn's heavily leveraged positions, pushing them perilously close to liquidation.

In an effort to mitigate his exposure, Wynn opened an $856 million short position, but this strategy backfired, resulting in a realized loss of $15.5 million. May 24 was Wynn's last profitable day in this cycle, where he reportedly secured $18.4 million from a tactical trade. However, the same day, he exited a $1.25 billion Hyperliquid long with a $13.4 million loss, despite earlier paper profits showing $40 million. The situation deteriorated as Bitcoin's price fell to $107,431, nearing Wynn's $104,000 liquidation price. At this juncture, Wynn announced his exit, having lost $17.5 million overall.

Wynn attributed his rapid decline to the "surreal" last few hours and specifically pointed to Hyperliquid’s funding costs as a key factor that was "draining his capital by the second." The initial report of over $25 million in losses likely reflects the total swing from his peak unrealized profit to his final realized position. Wynn's transparency in detailing his losses was acknowledged by some in the crypto community, while others criticized his high-leverage return to trading as reckless.

Adding another layer to the saga, on May 27, a different trader identified as wallet 0x2258 made $5.6 million in just three days by taking positions betting against James Wynn’s publicly known trades. This further highlighted the risks and volatility associated with high-leverage trading in the crypto market. Wynn's dramatic rise and fall serve as a cautionary tale for traders, underscoring the importance of risk management and the potential dangers of excessive leverage in volatile markets.

After the liquidation, Wynn posted to X, alleging that the market was being manipulated against him. He has separately requested donations to “support his cause” of exposing market manipulation. Wynn still held 770 Bitcoin worth around $80.5 million at a liquidation price of $104,035. Data from Hypurrscan shows that the trader is currently sitting on an unrealized loss of nearly $1 million on his 40x Bitcoin long position.

Wynn's transparency in detailing his losses was acknowledged by some in the crypto community, while others criticized his high-leverage return to trading as reckless. Adding another layer to the saga, on May 27, a different trader identified as wallet 0x2258 made $5.6 million in just three days by taking positions betting against James Wynn’s publicly known trades. This further highlighted the risks and volatility associated with high-leverage trading in the crypto market. Wynn's dramatic rise and fall serve as a cautionary tale for traders, underscoring the importance of risk management and the potential dangers of excessive leverage in volatile markets.