What happens when Bitcoin doesn’t follow the script, and a trader like James Wynn is already deep into a leveraged bet he can’t easily escape?
James Wynn Bitcoin trade spirals into a $60M wipeout
James Wynn, a well-known high-leverage crypto trader, recently experienced one of the steepest losses of his career. Over the span of seven days, he lost more than $60 million through a series of high-leverage Bitcoin (BTC) trades on Hyperliquid (HYPE).
The sequence began on May 19, when Wynn opened a 40x long position of 5,520 BTC at $103,302, placing his liquidation level at $98,294.
On the following day, he expanded the position to 7,764 BTC, raising the notional value to $830 million. His new average entry moved to $105,033, narrowing the buffer between market price and liquidation, now set at $100,330.
May 21 saw him increase exposure further to 9,371.71 BTC, pushing the position above the $1 billion threshold. At that point, the trade was in profit, showing unrealized gains of $10.71 million with an average entry of $108,005.
Later that day, Wynn closed 2,139 BTC, securing $11.92 million in realized profit and leaving 5,203 BTC still active, valued at $554.6 million.
He followed up with a fresh long on May 22, entering 10,200 BTC at $108,065. As Bitcoin touched $111,900, unrealized gains peaked at $39 million.
Momentum reversed quickly. On May 23, a 4% drop brought Bitcoin down to $106,700 following President Trump’s announcement of a 50% tariff on European Union imports.
Wynn responded by closing a separate Pepecoin (PEPE) position on May 24 with a $25.18 million gain. He then raised his Bitcoin long to 11,588 BTC at $108,243, placing his new liquidation level at $105,180.
That decision proved costly. On May 25, he exited at $107,746, booking a $13.39 million loss.
That same morning, he shifted to a short strategy. On May 25, Wynn scaled his Bitcoin short to 7,967.83 BTC, valued at $856 million, with a liquidation price set at $111,280.
He later exited over $1 billion worth of BTC short positions on May 26, recording a loss of approximately $15.87 million over a 15-hour span.
He also closed his Ethereum (ETH) and Sui (SUI) longs during the week, taking an additional $5.3 million in losses. The total drawdown over seven days reached $60 million.
Wynn acknowledged the setback in a post on May 26, noting that despite the losses, his account still held $25 million in profit from an original base of $3–4 million. The figure marked a sharp drop from his earlier peak of $87 million.
What makes James Wynn trader different from the average degen
Wynn began gaining traction in the crypto trading world in 2022, during the final phase of the previous bull market. His early entry into the space was reportedly funded by Alameda Research, a firm known at the time for backing emerging crypto traders.
That year, he invested $7,000 into the memecoin PEPE when its market cap was just $600,000. As the token’s valuation rose to $4.2 million, Wynn employed high-frequency trading methods to eventually turn his position into $25 million.
In March 2025, Wynn began trading on Hyperliquid, starting with a deposit of $4.65 million in USD Coin (USDC). Over the following two months, he executed 38 trades on the platform, focusing primarily on Bitcoin and memecoins such as PEPE, Official Trump (TRUMP), and Fartcoin (FARTCOIN).
Reports show that as of May 10, Wynn had accumulated $46.5 million in profits from his Hyperliquid trades.
His strategy blends high leverage with fast execution and a sensitivity to market sentiment. He typically operates with leverage ranging from 5x to 40x, building positions in fast-moving tokens that exhibit strong momentum.
Size is another defining aspect of his method. Trades often carry notional values in the millions, creating significant exposure but also increasing vulnerability.
Liquidation thresholds tend to fall within a narrow 2–3% range below the entry price, meaning a minor market drop can result in massive losses within minutes.
Wynn also integrates social media into his trading playbook. He regularly shares his positions and real-time updates on X, using transparency to build credibility and influence market psychology. That presence can amplify trends already in motion, adding another layer to his strategy.
How does leverage trading work?
High-leverage trading allows crypto traders to amplify their positions well beyond their actual capital, creating the possibility of large gains but also sharp, fast losses.
Platforms like Hyperliquid, Binance Futures, Bitget, and Bybit, traders provide leverage levels ranging from 5x to 100x, depending on the asset and exchange policies.
These tools offer flexibility and capital efficiency, but they also introduce a narrow margin for error that can result in forced liquidations within minutes.
The concept of leverage is straightforward. A trader using 10x leverage can open a $10,000 position with only $1,000 in actual capital. The remaining $9,000 is essentially borrowed from the exchange.
If the asset’s price rises by 1%, the position gains $100, which is a 10% return on the initial margin. However, the reverse is equally true. A 1% price drop results in a $100 loss, wiping out 10% of the trader’s capital.
The critical point is that a 10% move in the wrong direction fully erodes the initial margin, triggering liquidation. With 20x leverage, only a 5% drop is required to wipe out the position.
At 50x, the liquidation threshold tightens to around 2%. And at 100x, even a 1% move against the position is enough to result in a complete loss.
To better understand how this plays out, consider a scenario. A trader opens a long position of $100,000 on Bitcoin at $50,000 using 20x leverage. They contribute $5,000 in margin. If Bitcoin drops to $47,500, a 5% decline, the trader’s margin is entirely consumed, and the exchange liquidates the position.
Exchanges often apply additional buffers, known as maintenance margins, which may trigger liquidation slightly before the full margin is lost to ensure system solvency and protect insurance funds.
Most traders using high leverage rely on short-term strategies such as breakout momentum, news-based reactions, or high-volatility scalping. Entry timing is crucial, and exits are often planned with stop-losses or trailing orders.
Funding rates — periodic payments between long and short positions on perpetual contracts, also influence decision-making. A positive funding rate means long traders pay shorts, and vice versa.
Some traders incorporate these rates into their strategy to earn yield on sideways markets, though this often requires tight trade management and substantial volume.
For retail participants, the key lies in understanding these numbers, using margin calculators, and applying strict controls on position size.
Tools like liquidation heatmaps and volatility indicators can help assess entry risk, but they cannot eliminate the core exposure that leverage brings.
When used cautiously, leverage can support capital-efficient strategies or hedging. When applied without a well-defined risk framework, it becomes a fast track to liquidation.
As always, trade wisely and never invest more than you can afford to lose.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
