From $125K To $43M+ To $771K: Crypto Trader Nearly Wipes Out 4 Months Worth Of Gains In 2 Days

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A common saying in gambling is that "the house always wins." As Sam ‘Ace' Rothstein, the character played by Robert De Niro in the 1995 movie "Casino" explains, the secret is to keep the players coming back.

A cryptocurrency trader may have just learnt this lesson the hard way after wiping out millions in profits built over four months in two days.

Cryptocurrency smart money tracker Lookonchain reported on Wednesday that a trader who has recently made headlines for taking a $125,000 capital to over $43 million at one point with leveraged bets on Ethereum was now left with only $771,000.

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The losses came as the trader, who as of Aug. 18 had closed all his positions for a reduced but still impressive $7 million gain, decided to re-enter the market with another Ethereum bet. However, they were liquidated for $6.22 million as the asset crashed to approximately $4,060 on Wednesday, according to Lookonchain, which cited data from Hyperliquid, the decentralized exchange used by the trader.

As highlighted by one market observer, the unfortunate turn of events is likely the result of a lack of a risk management strategy or discipline to follow it. A proper risk management strategy could have allowed the trader to lock in a large chunk of the profits. It is often the difference between the profitable trader and the many who lose all their money in the market.

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"Really hurts to see people losing all their capital from greed," Nurp CEO Jeff Sekingersaid. "Never think you outsmarted the market and can continue compounding at fast rates forever. Eventually the market will punish you when you're too greedy. Remember you never go broke taking profit. And you don't take profit until you withdraw."

The saga also drew comparisons to the story of "James Wynn," a trader who grabbed headlines for a $1 billion Bitcoin position on Hyperliquid, using 40x leverage.

At one point, Wynn had a paper profit of $100 million and he seemed like a trading genius. But the euphoria proved fleeting as Wynn’s profit eventually turned into a $17.5 million loss.

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“I’ve decided to give perp trading a break,” Wynn said in the aftermath. “Its been a fun ride. Approx $4m into $100m and then back down to a total account loss of $17,500,000. The time has come for me to return to where I came from. The place that helped carve me into the gigantic degenerate I’am today."

But Wynn’s hiatus did not last long. As recently as Aug. 19, Lookonchain reported that Wynn had been partially liquidated on a 25x leverage bet on Ethereum.

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This article From $125K To $43M+ To $771K: Crypto Trader Nearly Wipes Out 4 Months Worth Of Gains In 2 Days originally appeared on Benzinga.com

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