On June 5, 2025, renowned highly leveraged trader James Wynn was subject to forced liquidation during the fluctuations in Bitcoin prices. His latest bet of tens of millions of dollars was partially liquidated, resulting in a single-day loss of 25 million US dollars. This is the second time he has suffered a huge loss due to highly leveraged trading after losing 48 million US dollars in November 2024.
Transaction background and liquidation details
Leveraged Positions and Market Fluctuations According to the on-chain data tracking platform Arkham Intelligence, Wayne opened a position of 2,000 Bitcoin perpetual contracts on Binance and OKX platforms on June 3rd, using a leverage of 50 times, with an initial margin of approximately 40 million US dollars (calculated based on the Bitcoin price of 42,000 US dollars at that time). On June 4th, the price of Bitcoin once rose to $45,000 due to the rising policy expectations after the South Korean presidential election. However, it plunged by 7% within 24 hours to $41,800 after the US inflation data dropped unexpectedly.
Forced liquidation process: When the price drops below $42,200, Wayne’s position triggers a partial liquidation mechanism. The exchange automatically closed out approximately 500 Bitcoin contracts, resulting in a loss of 25 million US dollars. The margin rate for the remaining 1,500 contracts was reduced to 12% (maintaining the margin rate at 10%). This liquidation was first carried out by Binance, followed by OKX. The two exchanges collected approximately 1.2 million US dollars in liquidation fees in total.
Analysis of Historical Losses and Trading Styles
Frequent high-leverage operations: Wayne is renowned for his “aggressive leverage strategy” and has made large bets on Bitcoin at key prices on multiple occasions over the past two years. In November 2024, when Bitcoin broke through $60,000, he used 100 times leverage to go long. However, due to expectations of the Federal Reserve’s interest rate hike, the market pulled back, resulting in a single-day loss of $48 million. After being forced to close his position, he was left with only $12 million in assets.
Risk control controversy: Industry analysts point out that Wayne’s trading model has obvious flaws – excessive reliance on a single asset (Bitcoin), high leverage (often using 50-100 times), and a lack of hedging strategies. Cryptocurrency analyst “CryptoCon” commented on Twitter: “During the window period of frequent macroeconomic data, holding unhedged highly leveraged positions is like ‘running naked through a minefield’.”
Market influence and industry response
Short-term price fluctuations: Wayne’s large-scale liquidation triggered a chain reaction in the market. At 18:00 (UTC) on June 4th, when the settlement took place, the spot price of Bitcoin dropped by 3% within 15 minutes, from $42,500 to $41,200. The funding rate in the derivatives market instantly turned negative, indicating a sharp decline in the speculative sentiment of bulls.
Discussion on the Risk control Mechanism of the Exchange: This incident has once again sparked controversy over the high-leverage clearing mechanism of the exchange. Some users questioned why Binance and OKX did not give advance notice or liquidate in batches, which led to a further decline in prices. However, the exchange responded that, in accordance with the user agreement, mandatory clearing does not require prior notice, and clearing in batches may lead to greater losses.
Retail investor herd trading Risk Warning: Cryptocurrency education platform CoinSmart released a report indicating that Wayne’s trading behavior was imitated by a large number of retail investors. In the first quarter of 2025, “high-leverage herd trading” led to an average loss rate of 63% for retail investors. The report suggests that investors “stay away from leveraged operations that exceed their risk tolerance”.
Wayne’s subsequent actions and market outlook
Position replenishment and strategy adjustment: According to informed sources, Wayne has transferred 15 million US dollars of stablecoins from his personal wallet after liquidation, attempting to replenish margin to retain the remaining position. But analysts believe that if the price of Bitcoin drops below $40,000, there is still a risk that the remaining positions will be completely liquidated.
According to informed sources, Wayne has transferred 15 million US dollars of stablecoins from his personal wallet after liquidation, attempting to replenish margin to retain the remaining position. But analysts believe that if the price of Bitcoin drops below $40,000, there is still a risk that the remaining positions will be completely liquidated.
Industry reflection on high-leverage Trading: This incident has prompted many exchanges to re-examine the risks of leveraged business. Bybit announced that it will reduce the maximum leverage of Bitcoin perpetual contracts from 100 times to 50 times starting from June 10th. Kraken has launched an “intelligent leverage” feature that automatically adjusts the upper limit of users’ leverage based on market volatility.
The high volatility of the cryptocurrency market and the risks of leveraged trading have once again been exposed through this incident. For ordinary investors, rationally assessing their risk tolerance and avoiding blindly following high-leverage strategies remain the keys to survival in a volatile market. Regulatory authorities may also take this opportunity to further push for restrictions on derivatives trading. For instance, the US SEC is currently considering setting a leverage cap of 10 times for cryptocurrency futures.
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