Trader turns $125K into $43M paper gains by compounding Ether longs

A crypto trader turned a modest $125,000 deposit into more than $43 million on paper in just four months through compounding on Ethereum longs. A market pullback hit the portfolio, but they still walked away with $6.86 million in realized profits.

According to blockchain analytics platform Lookonchain, the trader opened their position in May with two accounts on Hyperliquid. They began compounding every gain back into a single long bet on Ether, rolling profits into larger trades as the rally continued.

During the first week of May, Ethereum was trading around $1,800, 143% less than its price when the trader closed his position on August 17.

Four months yield 55x profits for Ether long trader

After executing the long bets severally during the summer, the trader’s two addresses had ballooned into a position controlling 66,749 ETH, worth more than $303 million at peak exposure. The accounts’ equity briefly crossed $43 million, a 344-fold increase compared with the original deposit.

“He masterfully compounded his profits, rolling every dollar of gain back into his ETH long to build a massive $303 million position,” Lookonchain wrote in an update on X.

The rain of profits came to a halt in mid-August, when Ethereum markets began to reverse on the back of heavy selling pressure from large holders and volatility across the broader crypto sector.

A trader turned $125K into $29.6M in only 4 months by going long on $ETH, a 236x return – truly legendary!

4 months ago, he deposited only $125K into #Hyperliquid and began going long on $ETH via 2 accounts.

He then masterfully compounded his profits, rolling every dollar of… pic.twitter.com/fbN6OKoRel

— Lookonchain (@lookonchain) August 17, 2025

During the week starting August 18, Ethereum exchange-traded funds in the United States experienced $59 million in outflows, marking the end of a streak of steady inflows from prior months. Several wallets in the top-100 Ether addresses, including one identified as “0x34f,” sold $1.29 million worth of the token, while wallet “0x806” unloaded more than $9.7 million.

Data from analytics firm Nansen showed that the latter transaction was the second-largest Ether sale in the 24 hours between August 17 and 18. Such moves likely influenced the leveraged trader’s decision to close before conditions worsened.

Facing the risk of margin calls, the trader finally closed out their position, counting $6.86 million in profits. The amount may be far short of the $43 million paper gains, but the realized outcome still hit a 55-fold return on the initial stake.

Compounding leveraged trades risks heavy losses

Leveraged trades are highly sensitive to market swings, and they require traders to take positions with constant collateral to stay above margin thresholds. A single sharp move to either side can wipe out any accumulated gains in seconds.

In July 2025, when crypto markets saw $264 million in liquidations in just one day, Ether longs alone accounted for $145 million of that total as bearish momentum swept across positions.

Unlike the successful exit for the $6.86 million trader, Lookonchain identified one trader named qwatio on X, who first booked $6.8 million in profits but later lost $10 million after a reversal.

Liquidations continue as Ether records positive price corrections

A 24-hour $357 million liquidation event was recently triggered by price corrections on both sides of the profit/loss spectrum, with Bitcoin, Ethereum, and other major tokens recording gains in the last 24 hours.

Ethereum absorbed around 20% of that pressure, as liquidations resulting from its long bets reached $25.2 million while shorts took the majority of the pain at $53 million. When the sell-off spread, leveraged accounts bore the brunt of forced closures, leaving markets vulnerable to cascading losses.

The second largest coin by market cap’s price has pulled back from recent highs near $4,700 into a critical support region around $3,800–$3,900. According to TradingView analysis, this range coincides with the 100-day moving average and the lower boundary of an ascending channel, a technical area that traders will be looking to enter.

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