Coincidence or Inside Information: Whale Opens Long Position with 50x Leverage Ahead of Trump’s Crypto Reserve Announcement

An investor with a highly leveraged long position and its closure just before President Donald Trump announced a strategic cryptocurrency reserve on Sunday has sparked speculation about insider trading.

What happened: In a post on X, capital markets commentator The Kobeissi Letter highlighted how a whale used 50x leverage on Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) to turn a $4 million investment into a $200 million position. “200 million long positions (including leverage) are no joke, especially in a market where Bitcoin had dropped by 25%,” said The Kobeissi Letter. The risky move meant that even a 2% drop in Bitcoin’s price could liquidate the trader. This was unusual: 24 hours earlier, someone had taken long positions for $200 million on Ethereum and Bitcoin with 50x leverage. This meant that even a 2% drop in Bitcoin would have liquidated $200 million. Today, President Trump announced the U.S. cryptocurrency reserve, which included BTC and ETH. Did someone know?

Additional data from blockchain tracker Spot On Chain revealed that the trader closed his position just before Trump announced the cryptocurrency reserve, which included Bitcoin and Ethereum, realizing a profit of over $6 million. “Big bet or insider information?” speculated Spot On Chain. The whale missed millions! Whale 0xe4d31c25 closed his long positions in BTC and ETH with 50x leverage just before Trump’s announcement of the cryptocurrency reserve — including these tokens. His trades (24 hours earlier): ETH long at $2,195K | $200M position, BTC long at $85.6K | $72M position. Closed two hours ago…

Blockchain detective and Coinbase CEO Conner Grogan investigated the trader’s activity and found that the funds came from phishing. “It turns out he was just a gambler with stolen funds, not someone with insider information,” said Grogan. I tracked this person’s wallet, and it turned out that he received his funds from phishing and was a whale in Roobet. He also closed his long positions before Trump’s second announcement, missing tens of millions. It turns out that he was just a gambler with stolen funds and not someone with insider information.

Leverage trading allows cryptocurrency traders to open larger positions using borrowed capital. While this can increase potential profits, it also significantly raises the risk of substantial losses due to cryptocurrency volatility.

Why it matters: The timing of the trade raised attention, especially following the subsequent rise in Bitcoin and Ethereum prices after Trump’s announcement. Bitcoin surged over $95,000, while Ethereum saw double-digit gains, surpassing $2,500. However, this wasn’t the first time suspicious trading activities were linked to Trump’s cryptocurrency announcements. In January, a whale bought $5 million in Official Trump (CRYPTO: TRUMP) just minutes after Trump stated that he knew nothing about it.