The $100-million fall: James Wynn and the perils of crypto leverage
In the volatile arena of cryptocurrency trading, the saga of James Wynn, a trader on the decentralized exchange (DEX) Hyperliquid, illustrates both the excitement and risks associated with it.
In late May 2025, Wynn suffered nearly $100 million in liquidations after Bitcoin (BTC) dropped below $105,000. His bold leveraged bets collapsed swiftly, erasing a vast fortune. Bitcoin’s extreme volatility, oscillating between soaring peaks and steep declines, underscores the promise and risk of high leverage.
Despite the severe losses, Wynn remained steadfast, maintaining significant leveraged positions with substantial unrealized losses. His ongoing involvement in risky ventures highlights the strong psychological appeal of cryptocurrency trading, where distinguishing between smart strategy and recklessness can be difficult.
Wynn, an anonymous trader, gained a reputation as a high-risk crypto trader due to his exceptionally large cryptocurrency investments and risky ways of crypto trading. He frequently held positions valued at over $100 million, and his social media often displayed screenshots of impressive profits.
Did you know? Some crypto exchanges offer leverage up to 125x. This means a $1,000 deposit can control a $125,000 position — but with massive risk. Just a 1% price move against the trade can wipe out the entire position in seconds.
Chronology of Wynn’s $100-million Bitcoin liquidation
The following section outlines the key events leading to Wynn’s massive $99.3-million liquidation on Hyperliquid. This chronology traces the rapid unraveling of his highly leveraged positions:
May 24, 2025
- Wynn opens a massive 40x leveraged long position on Bitcoin, valued at $1.25 billion.
- Entry price for this position: $107,993 per BTC.
May 29, 2025 (first liquidation)
- Wynn’s earlier position of 94 BTC worth $10 million is liquidated at $106,330, marking the start of his liquidation spiral.
- Around this time, Wynn posts on X, calling himself an “extreme degenerate” and acknowledging the high-risk nature of his strategy.
May 30, 2025 (major liquidations)
- Bitcoin’s price dips sharply following market uncertainty, including US President Donald Trump’s tariff comments.
- The first major liquidation happens: 527.29 BTC worth $55.3 million is liquidated when Bitcoin falls to $104,950.
- The second major liquidation happens: 421.8 BTC worth $43.9 million is liquidated as Bitcoin drops further to $104,150.
Total liquidations and losses
- Collectively, 949 BTC was liquidated across these positions.
- The total loss for Wynn was approximately $99.3 million over the week.
Post-liquidation status on May 26, 2025
- Wynn announces on X that he is quitting the “casino” after a good “gamble.”
Dethective exposes Wynn
- On June 14, 2025, crypto analyst Dethective alleges Wynn wasn’t truly incurring losses but rather trading against his own positions. According to Dethective, the figure was a peak unrealized profit, a temporary number on paper, not actual cash. “He had an unrealized profit of $90 million at one moment during the day,” he explains, emphasizing that this was never locked in as real profit.
How Wynn’s crypto gamble proved costly
After picking up the whopping loss of $100 million, Wynn alleged that the market was being manipulated against him and went appealing to his followers for donations, hoping to recover the millions he lost in just one week.
Despite earning $85 million earlier through high-leverage trades, Wynn saw $12 million vanish within a few days. In May, he suffered losses of $100 million, and his positions were liquidated again in early June, increasing his losses for the month to over $25 million.
Wynn’s journey from opening $1-billion positions with 40x leverage on Bitcoin to losing $100 million reflects Warren Buffett’s well-known warning about leverage. In a CNBC interview, Buffett quoted his late partner Charlie Munger, saying, “There are only three ways a smart person can go broke: liquor, ladies and leverage.” Buffett also emphasized, “If you don’t have leverage, you don’t get in trouble. If you’re smart, you don’t need it; if you’re dumb, you shouldn’t use it.”
Leverage trading in crypto has become a controversial topic, with some platforms offering up to 125x leverage on digital assets. Wynn admitted that the pressure from public attention distorted his decision-making. “With all this new attention, the trading spiraled out of control. I was basically gambling. I got greedy and stopped taking the numbers seriously,” he said.
Following Wynn’s liquidation, Binance co-founder Changpeng Zhao proposed introducing a dark pool DEX, which refers to exchanges that don’t show the order book or deposits into smart contracts. Such information could be hidden using zero-knowledge proofs or similar encryptions.
According to Zhao, hiding large orders from real-time order books could reduce front-running and slippage, offering large traders more privacy and fairness during volatile markets.
How Wynn embodies crypto’s high-risk, high-reward ethos
Wynn is well-known within crypto trading circles for his high-risk strategies. His rapid rise began with a daring $7,000 investment in the Pepe (PEPE) memecoin, which grew to nearly $25 million at its peak in 2025, earning him a reputation as a skilled and risk-taking trader.
Wynn’s significant gains encouraged him to pursue even riskier trades, including leveraged positions on platforms like Hyperliquid. His trading style reflects the bold approach he often demonstrates in speculative areas of the crypto market. Just hours before his $99.3-million Bitcoin liquidation on May 30, 2025, Wynn posted on X:
“I do not follow proper risk management, nor do I claim to be a professional; if anything, I claim to be lucky. I’m effectively gambling. And I stand to lose everything. I strongly advise people against what I’m doing!”
This admission highlights the gambling mindset that drives many high-leverage traders. Despite facing massive risks, such traders remain drawn to market volatility, chasing extraordinary returns while fully aware of the potential for heavy losses.
Wynn’s continued trading after significant setbacks reflects a broader crypto culture where risk-takers balance between great success and sudden failure. His story reflects the dynamics of a market where there is a strong probability of seeing your fortunes vanish or making significant gains instantly.
Did you know? Unlike traditional stock markets, Bitcoin trades around the clock, every day of the year. This non-stop market means traders must monitor price movements constantly or use automated bots to avoid missing major moves during off-hours.
Role of macroeconomic uncertainty in Wynn’s $100-million Bitcoin liquidation
External macroeconomic events added pressure to Wynn’s position. Renewed concerns over US tariff policies under President Trump created sudden economic uncertainty, impacting risk assets like Bitcoin.
As markets reacted to Trump’s tariff policies and related trade measures, Bitcoin’s price fell sharply. Around May 23, 2025, Bitcoin dropped approximately 4%, falling to $106,700 from about $111,000 shortly after the announcement, triggering Wynn’s liquidation. This demonstrates how vulnerable leveraged trades are to broader economic shifts, where even small policy changes can lead to major financial losses for overexposed traders.
When Wynn’s $100-million liquidation happened, crypto markets were rattled by macroeconomic uncertainty. Analysts, like Pav Hundal of Swyftx, flagged US President Trump’s tariff rhetoric as a key risk catalyst, exerting downward pressure on risk assets, including Bitcoin.
As trade tensions intensified and talk of tariffs resurfaced, digital-asset markets shed 4%-6%, increasing the vulnerability of leveraged positions.
Wynn’s case illustrates the dual nature of leverage. While it can lead to quick wealth, it also leaves traders open to rapid, severe losses, especially during times of geopolitical or economic instability.
Did you know? In May 2021, Bitcoin briefly crashed by 30% within hours due to a mix of liquidations and panic selling. Such flash crashes are common in crypto and are amplified by high leverage and thin liquidity on some exchanges.
Wynn accused of market manipulation in self-countered trades on Hyperliquid
On June 14, 2025, crypto analyst Dethective published an X post, allegedly exposing Wynn as someone who was counter-trading against himself and not suffering the losses he was claiming. He stated that Wynn’s narrative was just marketing to gain more followers whom he could monetize later.
The analyst examined blockchain data and identified unusual activity regarding Wynn’s trading.
Initially, Wynn’s transactions were typical of a major investor. He made large Bitcoin purchases with high leverage. However, Dethective noticed an irregularity: Wynn was trading against himself on Hyperliquid.
Wynn was simultaneously placing equal-sized long and short positions on Bitcoin, balancing wins and losses with each market shift. Dethective shared this discovery on X, posting:
This revelation eroded trust. Previously impressed by Wynn’s large trades, retail investors began questioning his motives. His reputation suffered as doubts arose: Was he a genuine market influencer or manipulating perceptions? Dethective’s findings exposed the truth.
How crypto traders can protect themselves from FOMO
Crypto traders can safeguard against FOMO (fear of missing out) and greed by adopting disciplined trading practices. Devising a well-thought-out trading plan and diversifying your investments can help.
You need to create a clear trading plan with specific entry and exit points and follow it while keeping market excitement at bay. Using stop-loss and take-profit orders helps reduce emotional decisions during market fluctuations. Spreading investments across multiple assets, rather than focusing on one, lowers the risk of significant losses from impulsive trades.
Regularly reviewing one’s portfolio and performance promotes accountability and discourages reckless actions. Traders should avoid excessive leverage, which magnifies profits and losses, often leading to emotional overtrading.
Learning about market psychology and identifying FOMO triggers can build emotional strength. Withdrawing from constant market monitoring at regular intervals and avoiding social media hype can help maintain clear thinking. Traders can make more thoughtful and sustainable decisions by prioritizing long-term goals over short-term investments.
