Blockchain analytics firm Arkham reported that Trend Research, led by well-known crypto investor Jack Yi, transferred its final 534 ETH (worth about $1.11 million) to Binance. The address, which once held over 650,000 ETH with a position size of $2 billion, now has a balance of just 0.165 ETH.
Data shows Trend Research bought 651,500 ETH at an average price of $3,180 and sold at $2,053, resulting in a loss of approximately $730 million.
How Loop Leverage Amplified the Disaster
Yi's strategy was straightforward: deposit ETH as collateral on Aave, borrow USDT, buy more ETH, and repeat the cycle. This loop leverage magnifies gains and losses: a 10% ETH move could double or wipe out positions. At its peak on January 20, Trend Research held over 650,000 ETH and had borrowed $958 million in stablecoins. In a bull market, this machine prints money; in a bear market, it shreds paper.
As ETH prices fell, collateral value shrank, triggering margin calls and forced liquidations. Yi could not escape the spiral.
"I Can't Help Being Bullish": Cognitive Bias at Play
Yi later admitted, "I can't help being bullish; it's related to my past entrepreneurial experience." After missing the 2020 rally due to early Bitcoin liquidation, he became biased toward long positions — a variant of loss aversion focused on the fear of missing out. He acknowledged being "too early" on ETH at $3,000, but the market didn't care. When prices broke 35% below his cost basis, value judgment became a reason to lose more money. His public call that "the four-year cycle is dead, and now is the best time to buy crypto" came just before ETH's crash from $3,000.
Whales Shed $7 Billion Collectively
Yi is not alone. On-chain data shows ETH long whales lost $7 billion collectively in this downturn. The common thread: leveraged long positions via DeFi protocols. In contrast, Tom Lee's BitMine used low leverage, high staking, and zero debt, holding $586 million in cash and 67% of its ETH staked for steady yields. The difference between getting crushed and surviving wasn't belief in ETH — it was how leverage was used.
The Double-Edged Sword of DeFi Transparency
The incident also reveals the dark side of DeFi's transparency. On Aave, every position and liquidation price is public. When traders knew Trend Research's liquidation threshold was around $1,685, short sellers had a clear target: push the price there, trigger forced sell-offs, and profit. On-chain data shows unusual concentration of short positions during Trend Research's critical moments. This may not be deliberate "hunting," but rational actors acting on public information. DeFi transparency becomes a spotlight that leaves no wounded whale hidden.
Yi's story is not a simple tale of greed. He is a decade-long crypto veteran. His mistake wasn't being bullish on Ethereum (whose long-term fundamentals remain intact) — it was using the wrong tool to express a correct view. Loop leverage turns a long-term thesis into a short-term bet. Even if your five-year view on ETH is right, one month of price volatility beyond your margin call threshold can wipe you out before you're proven correct. The market can stay irrational longer than you can stay solvent — an old adage that finds fresh victims every cycle.