A Hong Kong trading firm's $2 billion leveraged ether position collapsed this week after Ethereum (ETH) crashed to $1,750, forcing Trend Research to liquidate over 400,000 ether and leaving the firm with an estimated $680 million loss.
The unwind exposed how leveraged DeFi positions can rapidly deteriorate when prices move against borrowers.
Trend Research, led by Liquid Capital founder Jack Yi, had built one of crypto's largest private ether positions by borrowing stablecoins from AAVE against ETH collateral.
The strategy worked during rallies but reversed violently when ETH fell 30% in one week.
The Unwind
Blockchain analytics firm Bubble Maps tracked Trend Research moving 411,075 ETH to Binance since early February to repay Aave debt.
The firm deposited $700 million worth of ether over five days as liquidation thresholds approached between $1,698 and $1,830.
The position peaked at approximately 651,000 ETH in late January when prices hovered near $3,000. As ether dropped to $1,748 on February 4, the firm's collateral value shrank while fixed stablecoin debt remained constant, triggering forced sales.
Trend Research now holds roughly 247,000 ETH according to recent on-chain data, down from its peak holdings that would have ranked it among the largest private ether holders. The firm faces estimated total losses of $613 million to $686 million depending on calculation methods.
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Founder Remains Bullish
Yi characterized the massive selloff as risk management rather than capitulation. He maintained bullish targets of $10,000 for ether and $200,000 for Bitcoin despite acknowledging he called a market bottom too early.
"We're just making some adjustments to control risk, with no change in our expectations for the future mega bull market," Yi stated on X. He argued that volatility historically shakes out bulls before rebounds.
The firm began aggressively accumulating ether after October 2025's $19 billion crypto liquidation event, betting on a sustained recovery. That thesis faces testing as ether trades around $2,000, approximately 37% below Yi's average acquisition cost of $3,180.
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