The recent collapse of the cryptocurrency market
is impossible to discuss without mentioning one name —
And Li Hua (Yi Lihua), head of Trend Research and founder of Ledes Capital.
Many called him —
‘The most important bullish believer’ of this cycle.
And now,
he pays the price for his ‘faith’.
⸻
I. Cyclical lending (Looping): The nuclear reactor of the bull market
Lihua's actions were not complicated,
moreover, they were open to the entire market and visible on the blockchain.
In the DeFi protocol AAVE:
• Collateral is deposited in Ethereum (ETH)
• A loan is taken in USDT
• More Ethereum is bought with it
• Again collateral, again a loan, again a purchase
This is the most powerful engine of the crypto bull market —
Cyclical lending (Looping).
In the cycle of growth,
it is a wealth amplifier.
In the cycle of decline,
it is —
A black hole, consuming everything.
⸻
II. Three months, 60%, faith shattered by reality
In just under three months:
• ETH dropped from $4,800
• To $2,200
• The decline was more than 60%
And what about Lihua:
• Held 580,000 ETH
• Net asset value at its peak reached $762 million
• Now only about $200 million remains
But the cruelest part here is that —
this money does not belong only to him.
⸻
III. When institutions begin 'self-liquidation', the story ends
Investors will not allow it,
and it's impossible —
to calmly watch as positions are liquidated right on the blockchain.
Therefore,
Lihua is forced to act in the secondary market:
• Massively sell ETH
• To get 100 million USDT
• And pay off debts in AAVE
His exposure (Long):
Current ETH holding volume (as of 05.02.2026)
Trend Research still holds a massive long position in ETH: about 463,000 ETH.
Average entry price: ~$3,180 per coin.
Current value: ~$998 million (at current prices).
Realized loss: ~$173 million.
Unrealized (floating) loss: ~$474 million.
Leverage volume: ~$625 million.
Current liquidation levels of several positions are in the range of $1,576–1,682.
This step has only one meaning:
He has no more bullets to average down or replenish margin.
When a major institution
is forced to 'cut to the quick' (sell at a loss) to maintain margin health,
it means the finale is already written.
⸻
IV. Scenarios always repeat in history
Does this scene seem familiar to you?
2022, Three Arrows Capital (3AC):
• Asset volume $18 billion
• Continued to increase leverage at ETH at $3,000
• Believed in the 'Eternal Bull Market'
So what is the outcome?
• ETH reversed and crashed
• In less than a year
• Liquidation at a price of $1,400
Collapse of 3AC
triggered a chain reaction of institutional-level liquidations,
and Ethereum spiraled down to $800.
⸻
V. This is not a personal failure, this is the trial of the cycle
Today and Lihua
is exactly where 3AC stood.
It's not that he isn't smart,
not that he isn't a professional,
and not that he didn't try hard.
And in that, —
No one,
absolutely no one in the crypto market can resist the cycle.
⸻
VI. One truth for all traders
In this market
there has never been an 'Eternal Bull Market'.
The only thing you can rely on is,
is:
• Risk structure
• Position size discipline
• Respect for cycles
⸻
In the cryptocurrency market,
Leverage is both a scepter for coronation,
and a noose tightening around the neck.
In a bull market, it makes you a god;
In a bear market — it gives you no time even for repentance.$ETH
