In what is being described as the first major failure of a high-profile "Digital Asset Treasury" (DAT), Hong Kong-based investment firm Trend Research has all entirely liquidated its Ethereum (ETH) holdings. The firm, led by Liquid Capital founder Jack Yi, crystallized a staggering $747 million realized loss after months of defending a highly leveraged "looped" long position.

Risk Disclosure: High-leverage "looping" strategies—where an asset is used as collateral to borrow stablecoins to buy more of the same asset—create extreme liquidation risks. During rapid price drawdowns, these positions can become "death spirals" of forced selling. This analysis is for educational purposes only.

Data tracked by Lookonchain and Arkham Intelligence reveals a catastrophic "Buy High, Sell Low" sequence that began in late 2025.

• The Accumulation: Trend Research withdrew 792,532 ETH from Binance at an average cost basis of $3,267(approx. $2.59 billion in total capital).
• The Leverage Trap: The firm deposited this ETH into Aave to borrow hundreds of millions in stablecoins, which were used to increase its exposure as Ethereum fell from its $4,000 October peak.
• The Capitulation: Following Bitcoin's plunge in early February 2026, Ethereum hit a multi-month low of $1,742. To avert a total protocol liquidation, Trend Research redeposited 772,865 ETH back to Binance at an average price of $2,326 to repay its debts.

Featured Snippet Answer: Trend Research, an institutional Ethereum holder, liquidated nearly its entire $2.6 billion position in February 2026, resulting in a **$747 million realized loss**. The firm was forced to sell approximately 772,865 ETH at $2,326—significantly below its $3,267 entry price—to repay leveraged loans on Aave. This capitulation event significantly increased sell pressure on Ethereum, contributing to its slide toward the $1,750 support zone.

Just months ago, Trend Research was celebrated as the third-largest institutional holder of Ethereum, trailing only BitMine Immersion and SharpLink Gaming.

• The Residual: Following the fire sale, the firm’s primary wallet addresses now hold just 21,301 ETH (approx. $44M)—a 97% reduction from its peak holdings.
• The "Risk Control" Narrative: Founder Jack Yi characterized the move as a "risk-control measure" to protect the remaining principal. While Yi claims he remains bullish on the "2026 Institutional Era," the erasure of his prior $315 million profit plus $448 million in principal is a sober reminder of market volatility.

The forced selling from Trend Research created a "self-reinforcing" bearish regime for ETH.

• Whale Absorption: While Trend Research capitulated, Nansen data shows that "Smart Money" whales began accumulating near the $1,900–$2,000 demand zone.
• The $2,100 Pivot: Analysts now identify $2,100 as the critical resistance level. Until Ethereum convincingly reclaims this zone, the market remains in a "Sell the Rip" environment.

Experience Note: "Watching the Aave health factors for the Trend Research cluster was like watching a slow-motion train wreck," says a lead analyst at Nansen. "By the time they started dumping hundreds of thousands of ETH on Binance, the market had already front-run the move. This is why 'DAT 2.0' in 2026 must focus on professional risk hedging rather than simple directional leverage."

1. Lookonchain Official Alert: Trend Research ETH Capitulation Data — Original transaction tracking.
2. CoinStats: Trend Research Loses $747M: https://coinstats.app/news/Trend-Research-Loses-747M-After-Massive-Ethereum-SellOff — Detailed loss breakdown.
3. Investopedia: How Leveraged Longs Work: https://www.investopedia.com/terms/l/leverage.asp — Educational context on margin trading.
4. Aave Protocol: Liquidation Risk Parameters: https://docs.aave.com/risk/liquidation — Understanding health factors and liquidation thresholds.

Q: Did Trend Research go bankrupt after this $747M loss? A: There is no official filing for bankruptcy. Sources suggest that while the Ethereum trade was a total disaster, the firm had prior gains in other assets like WLFI and FORM that partially offset the principal hit.

Q: Why didn't they just "HODL" through the dip? A: Leverage removed that option. Because they had borrowed stablecoins against their ETH on Aave, a drop in price lowered their "Health Factor." If they hadn't sold to repay the loans, the Aave protocol would have automatically liquidated them at even worse prices.

Q: Is this the end of the 2026 Ethereum bull market? A: Not necessarily. In crypto, "Institutional Capitulation" often marks a local bottom. Clearing out high-leverage "weak hands" creates a healthier foundation for the next leg up, provided macro factors (like rate cuts) remain favorable.

⚠️📉 #Ethereum #ETH #TrendResearch #Liquidation #CryptoTrading