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Trader who made $49 million shorting crypto lost $24 million on ether in 12 seconds
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- DeepHorus
A prominent crypto trader who had amassed $49 million in short-selling profits was forcibly liquidated early Thursday, losing nearly $24 million on a single ether position in just 12 seconds. The wallet known as pension-usdt.eth was closed out of a 50,000 ETH short on the Hyperliquid exchange as ether prices surged, marking one of the most dramatic single-trade reversals in recent crypto history. The liquidation unfolded in five rapid forced sales, each pushing the price higher and making the remaining chunks of the short more expensive to close, according to Hyperliquidâs transaction records.
The trader, operating under the display name âPenision Fund,â had built a reputation as one of the yearâs most successful bearish bettors. Prior to this loss, the wallet had booked roughly $49 million in profits by shorting bitcoin and ether, including a $6 million gain on a 60,000 ETH short closed in June and a $3.6 million profit on a 1,400 BTC short the same month. The position that unraveled Thursday had been held for 1,445 hoursâjust over two monthsâthrough a period when bitcoin traded below $65,000 and shorting cryptocurrencies seemed like the safer side of the market.
The liquidation began at 04:51:03 UTC and ended at 04:51:15 UTC, according to Hyperliquidâs leaderboard data. The first forced sale covered 9,989 ETH at $2,193, followed by 20,698 ETH at $2,209, then 15,830 ETH at $2,214, and 1,871 ETH at $2,236. In those 12 seconds, etherâs price climbed $43, partly because the traderâs own forced buying added pressure to the market. When no buyers remained for the final 1,417 ETH, Hyperliquidâs insurance fund absorbed the position, a mechanism designed to protect the exchange and its other users from default losses.
This single trade erased half of the walletâs entire trading profits, leaving the account effectively empty. The leaderboard now shows pension-usdt.eth holding just $35.61, down 100% over the past 30 days, with $16.48 million in losses against $111.76 million in volume traded during that window. The broader market felt the ripple effects as well, with $2.74 billion in crypto shorts liquidated across all exchanges over 24 hoursâthe largest wave of forced short closures since at least 2021, according to data aggregators.
The dramatic reversal underscores the unforgiving nature of leveraged short selling in crypto, where a sudden price surge can wipe out even the most seasoned traders. Market analysts noted that Wednesdayâs U.S. Treasury buyback announcement triggered a broad risk-on rally, sending bitcoin from $64,000 to nearly $70,000 and ether up 18% in 24 hours. âThis is a classic short squeeze,â said one derivatives trader who asked not to be named. âWhen a large position gets liquidated in a fast-moving market, the forced buying feeds on itself, and the result is often catastrophic for the trader and destabilizing for the market.â
Looking ahead, Hyperliquidâs insurance fund is now responsible for covering the final 1,417 ETH, a cost that will be borne by the exchangeâs risk pool rather than by the liquidated trader. The incident is likely to prompt renewed scrutiny of risk management practices on decentralized perpetual exchanges, where position limits and liquidation mechanisms vary significantly. It also serves as a cautionary tale for retail traders who attempt to replicate the strategies of successful short sellers without adequate capital buffers.
More broadly, the episode highlights how quickly sentiment can shift in the crypto market. After months of sideways trading and bearish positioning, a single macro catalyst was enough to trigger a violent squeeze that observers say could mark a turning point. Whether the rally continues or fades will depend on Federal Reserve policy and broader risk appetite, but for pension-usdt.eth, the era of easy short money has come to an abrupt and costly end.
