Maji Fund's 40x BTC Failure and $75M ETH Pivot: A Forensic Look at Leverage Addiction
The fork wasn't in the code this time. It was in the portfolio allocation of a single fund manager who tried to force a 40x lever on Bitcoin twice in one day and failed both times. On August 23, 2024, Maji Fund's leader Huang Licheng watched his BTC long positions get rejected by the market, then pivoted to Ethereum with a $75 million long at $2,370. The ETH position is currently up $1.96 million. The BTC attempts cost him $165,000. This is not a story about Ethereum's technical superiority or Bitcoin's weakness. This is a story about what happens when conviction meets a margin call, and how the crypto market's most visible traders are often its most fragile.
The context here matters more than the trade itself. We are in the late summer of a post-halving year, with BTC oscillating around $60,000 and ETH trading in a $2,300-$2,500 band. The ETH spot ETFs were approved but the inflows have been tepid, more a trickle than a flood. Into this sideways chop, Maji Fund—a name that carries weight in certain Asian crypto circles—decided to press the accelerator. Twice. The first BTC long failed. The second, a $24.3 million position at 40x, also failed, leaving a $165,000 scar. Then came the ETH pivot: $75 million at $2,370, currently showing a $1.96 million unrealized gain. The fund also holds long positions in HYPE (worth approximately $19.85 million) and PUMP (worth approximately $4.87 million).
Let me dissect the mechanics of what actually happened here, because the surface narrative obscures the underlying pathology. A 40x leverage position means you are one 2.5% adverse move away from liquidation. That is not a trade; that is a coin flip with extra steps. The fact that Huang attempted this twice in a single day suggests not conviction but compulsion—a gambler's rhythm, not an analyst's thesis. When the BTC longs failed, the immediate pivot to ETH at $2,370 with $75 million is telling. It says: I need a win, and I need it now. The ETH position is currently profitable, which will be read by many as vindication. Yield is a sedative; volatility is the needle. And right now, the needle is in.
From my audit experience, I can tell you that the most dangerous positions in any portfolio are the ones that are working. A $75 million long at $2,370 means the liquidation cascade begins somewhere around $2,250—a mere 5% drop from entry. In the current market, where BTC can move 3% on a single tweet, that is not a comfortable buffer. It is a tripwire. The fund's simultaneous holdings in HYPE and PUMP suggest a broader bet on the Hyperliquid ecosystem and the Solana meme-coin complex, respectively. If HYPE is indeed the Hyperliquid token, then Maji is not just a trader; it is a participant in the very infrastructure that enables its leverage. That is a form of vertical integration that should concern anyone watching the derivatives market's concentration risk.
The contrarian angle here is uncomfortable for the bulls. The market will likely interpret this as "smart money" rotating from BTC to ETH, a signal that the ETH/BTC ratio is about to rip higher. But cold hands dissect the heat of a hype cycle. What this actually represents is a fund manager who was wrong twice in one morning, then doubled down on a different asset with even more capital. That is not a signal; that is a symptom. The $1.96 million in unrealized ETH profit is real, but it is also a rounding error against the $75 million notional exposure. One bad week in ETH could wipe out not just the profit but a significant chunk of the fund's capital. The HYPE and PUMP positions add further volatility to an already unstable portfolio.
What the bulls got right is that ETH at $2,370 does represent a reasonable entry point for a medium-term long. The ETF flows, while modest, are structurally supportive. The Dencun upgrade has reduced L2 costs, and the ecosystem continues to ship. But none of that justifies 40x leverage. The trade is not the thesis; the position size is the risk. If ETH holds above $2,370, Maji looks like a genius. If it breaks below $2,250, we will see a liquidation event that will be blamed on "market manipulation" or "unforeseen circumstances" rather than the simple math of over-leverage.
We audit the code, but we mourn the users. In this case, the code is the portfolio, and the user is Huang Licheng himself. The pattern is familiar: a public figure with a reputation for high-risk trades, a fund that operates with centralized decision-making, and a series of positions that could end in either triumph or catastrophe. The market will watch the $2,370 level on ETH with unusual interest now. If it breaks, the $75 million long becomes a liability. If it holds, we will see copycat trades from other funds trying to ride the same wave. Either way, the lesson is not about ETH versus BTC. It is about the seductive danger of leverage in a market that rewards patience and punishes desperation.
Assets don't lie; narratives do. The narrative here is that a smart fund rotated from Bitcoin to Ethereum. The reality is that a leveraged trader failed twice, then chased a loss with a larger position. The ETH trade is currently green, which will attract followers. But the structural fragility of the position—$75 million at 40x-equivalent risk, with a 5% liquidation buffer—should give anyone pause. The question is not whether Maji Fund is right about ETH. The question is whether the fund can survive being right in the short term and wrong in the medium term. In this market, the answer is often no. Watch the $2,250 level. If it breaks, the fork in the road becomes a cliff. And we will all be watching to see who falls first.