An $11 billion Bitcoin whale has re-entered the market with a substantial short position, indicating that some major investors are preparing for further declines in the cryptocurrency market. This move comes amidst concerns over tariffs and an ongoing government shutdown, contributing to a general sense of unease.
The prominent investor, known in crypto circles as a "Bitcoin whale" due to their significant holdings, has established a $235 million short position on Bitcoin (BTC) using 10-times leverage. This strategy is essentially a bet that the price of the world's leading cryptocurrency will decrease.
This new short position was initiated on Monday, when Bitcoin was trading at $111,190. According to blockchain data from Hypurrscan, the whale currently holds an unrealized loss of approximately $2.6 million on this trade. The position would be liquidated if Bitcoin's price were to rise above $112,368.
This recent move follows a pattern, as the same whale reportedly profited around $200 million from a similar leveraged short position during a recent crypto market crash.
Leverage in trading allows investors to control a larger position than their initial capital would normally permit by effectively borrowing funds. While this can magnify potential profits, it also significantly increases the risk of substantial losses, including the potential to lose the entire investment.
Blockchain data platform Arkham reported on Monday via an X post that "The whale who made $200M shorting the Bitcoin crash to $100K has now moved $30M to Hyperliquid and is shorting AGAIN."
In addition to opening the new short position, the whale has also transferred $540 million worth of Bitcoin to various new wallets over the past week. This includes a transfer of $220 million to wallets associated with the Coinbase exchange.
The emergence of this significant Bitcoin holder, often referred to as the "$11 billion Bitcoin whale," occurred approximately two months ago. Previously, this entity reportedly moved around $5 billion worth of BTC into Ether (ETH), briefly making it the largest holder of ETH among corporate treasuries, surpassing Sharplink. This was reported by Cointelegraph on September 1.
According to analyst Willy Woo, a noted early Bitcoin adopter, substantial selling activity from previously dormant Bitcoin whales was a primary factor contributing to Bitcoin's limited price movement in August.
New Bitcoin Whales Face Significant Unrealized Losses
In parallel with the actions of the prominent whale, newer Bitcoin whales are currently experiencing cumulative unrealized losses exceeding $6.95 billion. This situation arises from the recent crypto market downturn, which saw Bitcoin's price fall below the critical $113,000 threshold.
Crypto analytics platform CryptoQuant stated in an X post on Tuesday that "Bitcoin is trading below its average cost basis of ~$113K, leaving it with $6.95B in unrealized losses, the largest since Oct 2023." The post further noted that this cohort of investors holds approximately 45% of the total Whale Realized Cap.
Despite the dip in investor sentiment, some analysts viewed Bitcoin's four-day decline to $104,000 as a beneficial correction. This movement is believed to have helped reduce excessive leverage in the market, leading to more cautious positioning among participants.
Concurrently, blockchain analytics firm Glassnode reported on Tuesday that the supply held by short-term Bitcoin holders has increased. This indicates that "speculative capital" is capturing a larger portion of the market.