Leverage spike detected. Run.
On August 23, 2024, Maji Fund—led by the infamous Huang Licheng—attempted to open a 40x leveraged BTC long position. Twice. Both failed. Total loss: $165,000 from a $24.3 million position. Then, within hours, they flipped. They dumped BTC and piled into a $75 million ETH long at $2,370. Current profit: $1.96 million. The narrative is already forming: “Smart money is rotating from BTC to ETH.” But the on-chain data tells a different story—one of desperation, not conviction.
Who is Maji Fund? Huang Licheng (known in Chinese crypto circles as “Liang Xi”) is a notorious high-leverage trader with a history of blow-ups. He’s the guy who turned $10,000 into $10 million in 2021, then lost it all in 2022. He’s back. And he’s using 40x leverage on a $75 million fund. That’s not a strategy. That’s a death wish.
The context matters. August 2024 is a weird market moment. BTC is range-bound around $60,000. ETH is at $2,370, down from its post-ETF highs. The market is waiting for a catalyst. Maji’s move is being touted as that catalyst. But look closer: the fund holds $19.85 million in HYPE (Hyperliquid’s token) and $4.87 million in PUMP (a Solana meme coin). This is not a calculated institutional rotation. This is a gambler chasing losses.
Core breakdown: - Failed BTC longs: Two attempts, both 40x leverage, both closed at a loss. The second attempt was $24.3 million. Lost $165k. That’s a 0.68% loss on the trade, but the leverage amplifies the pain. The fund’s risk management is clearly broken. - ETH long: $75 million at $2,370. Current profit $1.96 million (2.6% move). The entry price is critical. If ETH drops to $2,250 (a 5% decline), the loss is $3.75 million. At 40x leverage, the liquidation price is around $2,308 (assuming a 2.5% maintenance margin). Yes, a mere 2.6% drop from entry wipes out the entire position. - Other holdings: HYPE long (likely on Hyperliquid, a DEX that offers 40x leverage) and PUMP. These are high-risk, low-cap tokens. They add to the portfolio’s fragility.
Contrarian angle: The market is misreading the signal. Most analysts will say: “Maji’s move is bullish for ETH. They’re adding $75M of long exposure.” That’s surface-level. The real story is the leverage. 40x leverage means a 2.5% move against you triggers liquidation. The market is currently in a low-volatility regime. But a single whale liquidation can spark a cascade. If ETH drops below $2,300, Maji’s liquidation will be forced. The exchange (likely Binance or Hyperliquid) will sell the collateral. That sell pressure could push ETH down further, triggering more liquidations.
Based on my experience auditing liquidation cascades in 2020 and 2022, a concentrated 40x lever on a $75M position is a systemic risk. It’s not a vote of confidence. It’s a bomb waiting to go off. The market should be pricing in the probability of that bomb, not celebrating the position.
ETH at $2,370 is the line in the sand. That’s Maji’s entry. If ETH holds above that, they’re fine. But if it breaks, the floor drops out. And the worst part? The fund is already in the red on BTC. They’re doubling down. That’s the classic gambler’s fallacy.
HYPE and PUMP are the canaries in the coal mine. Maji holds $20M in HYPE (Hyperliquid’s token). Hyperliquid is a DEX that offers 40x leverage. If Maji’s ETH position gets liquidated, they might be forced to sell HYPE to cover margin calls. That could crash the HYPE price. The same for PUMP. These are illiquid tokens. A large sell order will move the market.
Takeaway: Don’t follow Maji’s trade. The fund’s track record is a graveyard of blown accounts. The smart money is not rotating into ETH; it’s rotating out of this fund. Watch the $2,300 level on ETH. If it breaks, expect a sharp drop. The real trade is not to long ETH. It’s to short the leverage. Or better yet, sit on the sidelines and wait for the liquidation fireworks.