ZEC Short Seller Faces $25.7M Loss as ETF Inflows Rise
ZEC has surged from about $400 to above $1,200 in three months, leaving major short seller Garrett Jin with an estimated $25.7 million unrealised loss. His short position totals roughly 39,760 ZEC, while he also holds Bitcoin long positions. The ZEC rally highlights the risk of crowded short trades and potential further volatility if liquidation levels are reached.
Crypto market sentiment also received support from institutional demand. Bitcoin spot ETFs recorded $987 million in net inflows last week, extending the streak to three weeks. Ethereum spot ETFs attracted $218 million over the same period. Capital B separately bought 376 BTC, bringing its holdings to 3,521 BTC.
However, security concerns remain a major market risk. A white-hat hacker removed about 4,000 BTC, worth roughly $320 million, from Liquid Network’s federation wallet. The network paused operations and LBTC deposits and withdrawals, while the attacker said most funds would be returned after the vulnerability is fixed. SlowMist also warned that two attackers may be preparing to exploit a Notional Finance-related vulnerability on BNB Chain.
Other notable developments include Binance’s CNPY airdrop for eligible Alpha users, Harmony’s proposal to shut down its mainnet and migrate ONE to Ethereum, and continued heavy leverage in Bitcoin markets. Analysts said Bitcoin experienced its sharpest deleveraging since 2023, but traders have already begun re-entering positions. ETF inflows remain a bullish signal, while leverage and security incidents could amplify short-term price swings.
Neutral
The market signals are mixed. Bitcoin and Ethereum spot ETF inflows for a third consecutive week, along with Capital B’s additional BTC purchase, indicate sustained institutional demand and provide a supportive backdrop for major cryptocurrencies. ZEC’s sharp rally may also trigger short covering and further upside if Garrett Jin or other leveraged traders are forced to close positions.
At the same time, the market faces clear downside risks. The Liquid Network incident involved about $320 million in BTC and led to a temporary halt in network activity and LBTC transfers. Similar bridge, wallet and protocol exploits have historically caused rapid risk-off reactions, especially for affected tokens and DeFi projects. Bitcoin’s recent deleveraging reduced some systemic risk, but the reported return of traders and elevated open interest raise the possibility of another liquidation wave.
Therefore, the overall view is neutral rather than decisively bullish or bearish. Short-term trading may be driven by ZEC short liquidations, ETF flow data and news about the Liquid exploit. Longer term, persistent ETF demand is constructive for BTC and ETH, but stronger security controls and lower leverage are needed before market stability can improve materially.