Author: Frank, PANews

The whales on Hyperliquid have become the focus of on-chain transactions. Here, dramas of sudden wealth and complete ruin unfold every day.

Delving into the on-chain data, these whales reveal a diverse range of personalities. Some are "contrarian indicators" who hold substantial funds but repeatedly fail, some are "snipers" who lie in wait for half a year to strike a decisive blow, and others are "cold-blooded machines" that use algorithms to harvest retail investors every second.

The data stripped away the mystique surrounding these major players. PANews selected five of the most representative addresses on Hyperliquid: including the well-known "Big Brother Machi," a mysterious figure suspected of possessing insider information, a market maker with billions in capital, and the recent "comeback miracle" and "unyielding bulls." Through their thousands of transaction records, we seem to be able to find our own portrait among these examples.

Brother Machi: Winning is like "bird food," losing is like a "collapse."

Speaking of Brother Machi, he seems to have become a contrarian indicator in the current market, from the huge losses at Friend.tech to the current massive losses in futures contracts. His trading operations are almost always a negative example for practitioners and investors in the crypto industry. But even negative examples are still lessons.

Since entering the Hyperliquid trading market, Machi has accumulated losses of $46.5 million, placing him among the top losers on the entire Hyperliquid trading leaderboard. His trading style profile reveals a typical pattern of high win rate and low profit/loss ratio. His overall win rate is 77%, but his profit/loss ratio is 1:8.6. Furthermore, his average holding time for winning trades is 31 hours, while his average holding time for losing trades is a staggering 109 hours. This indicates a tendency to exit with small profits, but a tendency to hold onto losing positions until incurring massive losses or even a margin call.

Overall, his ability to judge short-term market trends is indeed quite accurate, but in setting up trading strategies, he always risks losing as much as $8.60 to gain $1.

However, in actual trading, his overall position was still profitable at $15 million before the market crash on October 11th. After the crash, due to the liquidation of multiple orders in XPL and ETH, his overall profit turned into a loss of over $11 million. Subsequently, with more trading, he drifted further and further away from breaking even.

Analyzing the root causes of Maji's losses, two characteristics became his fatal flaws.

First, he was a "die-hard bull," with 94% of his trades being long and only 6% being short. He lost $46.88 million on long positions and made $380,000 on short positions. This one-sided style is fatal in a falling market. Second, he averaged down on losses without using stop-loss orders. In many of his large losing trades, when his orders were on the verge of liquidation, his first choice was often to add margin rather than stop-loss. This led to his losses escalating. Overall, Brother Machi's profits were like "bird food," and his losses were like "market crashes." From a trading psychology perspective, Brother Machi has significant flaws in loss aversion, refusal to admit mistakes, and sunk costs, making him unsuitable for emulation.

10.11 Short Selling "Insider" Expert: A Cold-Blooded Sniper

If Machi is a hot-blooded warrior wielding a machine gun, then this guy is a sniper who lies in ambush for three days just to pull the trigger once.

He traded very infrequently, completing only five trades in six months, with a win rate of 80%, earning a staggering $98.39 million. Furthermore, unlike his friend who constantly deposited money, this whale was constantly withdrawing funds.

His most famous trade was depositing $80 million on October 11th to short BTC, and then withdrawing with a profit of over $92 million five days later. After completing that astonishing trade, he didn't linger, but instead remained restrained. He then shorted again on October 20th, earning $6.34 million. Although he suffered a small loss of $1.3 million on his long position on November 8th, it was negligible compared to his previous profits. Currently, his account still holds $269 million worth of long ETH positions, with a floating profit of approximately $17.29 million. Judging from his trading style, this bigwig, believed to have insider information, is like a lurking crocodile, remaining still until he strikes, taking the biggest bite of the market and then disappearing.

A market maker with $1 billion in capital: Dominating the market with algorithms

The address 0x5b5d51203a0f9079f8aeb098a6523a13f298c060 is currently the most profitable address on Hyperliquid. If the top two are "gamblers" and "hunters," this one is a super whale at the market-making level. To date, this address has deposited a total of $1.11 billion into Hyperliquid and then withdrawn $1.16 billion. Its current unrealized profit is approximately $143 million.

His strategy involves first establishing several large initial positions, such as short positions in multiple tokens like ETH. Then, he frequently adds to and reduces these positions using algorithms to generate profits. This results in two profit models: one is profiting from trending short positions, and the other is capturing arbitrage opportunities in the market through high-frequency trading.

A closer analysis reveals that not only is the top-ranked address a trader using this method, but the second and third-ranked addresses are also whales profiting from this arbitrage strategy.

Taking the second-ranked address as an example, 51% of its transactions were pending orders, placing buy and sell orders at the top and bottom of the order book to profit from small fluctuations. Although the size of each individual transaction was small, only $733, the address completed 1,394 coin orders in one day, and the daily profit could accumulate to tens of thousands of dollars.

However, the operations of these whales are of little reference value to retail investors, because whales not only have a fee advantage, but also have high-speed quantitative programs and hardware support.

The most profitable week: a period of hard work and careful planning.

This address isn't actually considered a whale, but it came under PANews's scrutiny because of its exceptionally high returns over the past week.

In terms of capital size, this address had previously invested approximately $46,000, which seems to be typical of a retail investor. Looking at past trading results, his account balance continued to decrease until the end of November, with a loss rate reaching 85%. During this period, he was a typical loser, with haphazard trading and stubbornly holding onto small-cap cryptocurrencies.

However, after December 2nd, he seemed like a completely different person, or perhaps he had found the holy grail of trading, achieving a perfect 21-0 record by December 9th. He also grew his initial capital from $129 to $29,000, demonstrating exponential growth.

On December 3rd, he tentatively opened a position with 1 ETH, earning $37. On December 5th, confirming his initial feeling, he increased his position to 5-8 ETH, earning around $200 in a single trade. On December 7th, he increased his position to 20 ETH, achieving a profit of $1000 in a single trade. On the 8th, he increased his position to 50-80 ETH, earning $4000 in a single trade. On December 9th, his position reached 95 ETH, with a profit of $5200 in a single trade.

The above is an overview of his recent trading activities, during which he made several changes. First, he stopped trading everything and switched to trading only ETH. Previously, he traded over ten different cryptocurrencies. Second, he stopped holding losing positions and opted for a quick and profitable approach. His average holding time was previously about 33.76 hours, but in the past week, it has decreased to 4.98 hours. He seems to have abandoned holding losing positions and adopted a profit-taking strategy. Third, his position sizing changed from random openings to a "rollover" strategy. This "rollover" strategy is a common method for rapidly growing small amounts of capital.

However, while his profits increased rapidly, his leverage also increased significantly. In past trades, his leverage averaged 3.89x, recently rising to around 6.02x. This amplified his trading risk; as of this writing, his recent ETH position has incurred losses exceeding $9,000 due to the rapid market surge, wiping out nearly half of his profits. His profit curve has also shifted from an upward exponential increase to a precipitous drop.

Overall, this shift in trading style has indeed made him stronger, but also more vulnerable. Whether he can recover his losses depends on how he handles losing orders and maintains a high win rate.

Iron-headed bulls: A tragic song of die-hard bulls

Compared to the traders mentioned above, this whale's style is more like that of a staunch bullish believer and a "victim" of SOL.

This whale's total investment reached $236 million, with long positions accounting for 86.32% of his total trades. Of his more than 700 trades, 650 were long positions. However, he lost over $5.87 million on his long positions, while profiting $189,000 on his short positions. Although he lost over $5 million overall, this drawdown (approximately 2.4%) is still within a manageable range compared to his total turnover of over $200 million. His biggest problem lies in his position structure.

His loss structure was very peculiar; almost all of his profits were wiped out by SOL alone. Among the tokens he traded, FARTCOIN and SUI yielded profits exceeding $1 million, while ETH and BTC also generated profits close to $1 million. However, his single loss on SOL reached $9.48 million. If you exclude the SOL losses, he is actually a very skilled trader (accumulated profits of approximately $4 million in other cryptocurrencies). But he seemed to have an obsession with SOL, stubbornly holding long positions, only to be repeatedly wiped out by SOL's downward trend.

From his trading, we can learn the following: even if you have hundreds of millions of dollars, if you develop "emotional attachment" or "obsession" with a certain cryptocurrency, it can easily destroy you, especially if you go against the trend.

In short, in this deep sea teeming with whales, algorithms, and insider trading, there is no holy grail of success. For ordinary investors, the actions of these whales are largely unreplicable. Perhaps the only thing we can learn from them isn't how to earn a hundred million dollars, but how to avoid becoming a loser like Brother Machi who "holds onto losing positions," and how not to try to challenge tireless algorithmic machines with our limited funds and speed.

Respecting the market and trends may be the most valuable lesson the market teaches us.