In a dramatic turn for institutional crypto trading, Abraxas Capital finds itself on the wrong side of the market, with two accounts holding massive short positions in Ethereum (ETH), Bitcoin (BTC), Solana (SOL), HYPE, and Sui (SUI) now sitting on unrealized losses exceeding $190 million.
According to on-chain analytics from Lookonchain and reports by Jinse Finance and Odaily Planet Daily, the losses are led by an enormous leveraged short on 113,819 ETH, worth approximately $483 million, which alone has generated more than $144 million in unrealized losses.
These figures have sent shockwaves across the trading community, sparking debates on whether Abraxas’ strategy was a case of overconfidence in a bearish thesis or a calculated risk that simply misjudged market momentum.
Inside the Massive Short Positions
The biggest position dragging Abraxas Capital underwater is undeniably Ethereum. With crypto’s second-largest asset surging in recent weeks, the fund’s ETH shorts have suffered heavy mark-to-market losses.
But ETH isn’t the only culprit. The two accounts are also shorting:
- Bitcoin (BTC) – the world’s largest cryptocurrency, which has staged a strong recovery this quarter.
- Solana (SOL) – one of the best-performing altcoins of the year.
- HYPE – a highly volatile memecoin attracting retail hype and whale accumulation.
- Sui (SUI) – a next-gen Layer 1 blockchain token with increasing adoption.
In total, the combined unrealized loss across all these assets now sits north of $190 million, making it one of the largest publicly tracked losing short positions in recent months.
From $106M to $190M: Losses Spiral in Weeks
Interestingly, these positions weren’t always this deep in the red. Back in late July, analytics reports pegged Abraxas Capital’s unrealized losses at around $106 million.
However, a sharp bullish rally in both Bitcoin and Ethereum, coupled with an altcoin surge, has nearly doubled the loss figure in just a matter of weeks. Abraxas’ timing couldn’t have been worse — each asset they were shorting moved significantly higher, in some cases by double-digit percentages.
The Leverage Factor: A Double-Edged Sword
One of the most alarming aspects of this saga is the size and leverage of the positions. Reports suggest these shorts are placed on Hyperliquid, a decentralized perpetuals exchange known for allowing substantial leverage.
While leverage can magnify profits in the right direction, it amplifies losses at lightning speed when the market moves against the position. In this case, the rising prices of ETH, BTC, SOL, HYPE, and SUI have rapidly escalated Abraxas’ losses.
There’s also the looming threat of margin calls and forced liquidations. If prices keep climbing, the fund may be compelled to add more collateral or close positions at a loss — potentially locking in hundreds of millions in realized losses.
Funding Rate Income: The Silver Lining
Despite the massive paper losses, there is one positive note for Abraxas — funding rate income. In perpetual futures trading, traders pay or receive funding fees depending on whether they hold long or short positions and the prevailing market funding rate. With demand heavily skewed toward longs during bullish rallies, short traders often receive payments from longs.
Reports indicate that Abraxas’ ETH short positions alone have earned them over $28 million in funding rate income. While this offsets a fraction of the loss, it’s nowhere near enough to cover the $190 million deficit.
Possible Strategy: Hedge or High-Stakes Bet?
Some market analysts believe these massive shorts might not have been purely speculative bets on a market downturn. Instead, they could be hedge positions against long exposure elsewhere — either in spot holdings or venture capital portfolios.
If true, the losses seen on these short accounts might be counterbalanced by gains in other holdings. However, without public confirmation from Abraxas Capital, this remains speculative.
Still, the sheer scale of the exposure suggests a high risk tolerance, and possibly a belief that the market was due for a correction that has yet to materialize.
Market Reactions and Trader Sentiment
News of Abraxas’ mounting losses has quickly spread through crypto Twitter (X), Telegram trading groups, and Discord communities. Traders are split into two camps:
- The bears: who believe this is a sign that the market is overextended and that Abraxas could be proven right in the coming weeks.
- The bulls: who view this as further evidence that short sellers are getting squeezed out, fueling even higher prices.
In the short term, if Abraxas is forced to close their positions, it could trigger a short squeeze — pushing prices even higher as buy orders flood the market.
Broader Implications for Institutional Crypto Trading
This incident is more than just one fund’s bad month — it’s a case study in the risks of high-leverage crypto trading. For institutional investors, it’s a reminder that even sophisticated strategies can crumble in the face of sudden market reversals. For retail traders, it’s proof that big money doesn’t always win and that risk management is king.
Additionally, the transparency of blockchain transactions means the market can track institutional activity in real time. This level of visibility has given on-chain sleuths unprecedented insight into the positioning of major players — a dynamic that doesn’t exist in traditional finance.
Will Abraxas Hold or Fold?
The big question now is what Abraxas Capital will do next. They have a few options:
- Hold the positions in hopes of a market pullback.
- Add more margin to avoid liquidation and wait for a correction.
- Cut losses and reallocate capital elsewhere.
- Each path comes with significant risks, and the decision will likely depend on their overall portfolio exposure and long-term market outlook.
A High-Stakes Gamble in a Bullish Market
Abraxas Capital’s $190 million unrealized loss on short positions in ETH, BTC, SOL, HYPE, and SUI is a stark reminder of the unforgiving nature of leveraged crypto trading. Whether this was an ill-timed bearish bet or a hedge gone wrong, the result is the same — the market has moved against them in spectacular fashion.
As crypto prices continue to climb, all eyes are on Abraxas. Will they weather the storm and ride out the rally, or will they be forced into a costly retreat?
One thing is certain: in the fast-moving, transparent, and highly volatile world of crypto, even the biggest players can get REKT.
Disclaimer: All content published by Crypto Pro Live (CPL) is intended solely for informational and educational purposes. It does not constitute financial, investment, or legal advice. While we strive for accuracy and reliability, CPL assumes no responsibility for any financial decisions, losses, or actions taken based on the information provided. Readers are encouraged to conduct thorough research and seek professional guidance before making investment choices.
Nikolai Carter
