Compiled & translated by: TechFlow TechFlow
Speaker: Taiki Maeda
Podcast source: Taiki Maeda
Original title: I Made $578,000 Shorting ETH. What I'm Doing Next.
Broadcast date: November 26, 2025
Key points summary
In just two months of bear market trading, Taiki Maeda made $578,000 by short. In this podcast episode, he provides an in-depth analysis of potential trends in the cryptocurrency market over the next few months and advises investors to prioritize preserving capital rather than chasing high returns. He also shares his current stablecoin and airdrop mining strategies, offering listeners more practical investment insights.
Summary of key viewpoints
For the past two months, I've been short ETH. I short$1 million worth of ETH around $4,150, making some profit; then I added another $1.5 million to my short position at $3,387. My total profit over the past two months is approximately $578,000.
Why did I choose to take profits at this time? I still believe that the price of ETH may fall further, but my short target is ETH to $3,000.
Why was I bearish on ETH before? If the Altcoin market has "collapsed," this impact will spread to ETH, because the slump in Altcoin cannot support ETH's valuation of over $500 billion.
I believe ETH is flawed, and unless circumstances change, you can completely ignore ETH as an investment target for the next 5 to 10 years as a cryptocurrency investor.
If you can overcome the psychological barrier of not considering ETH investment, I believe it will make your decision-making much simpler, reduce your stress levels, and may even extend your life expectancy.
I don't think we'll experience a 12-month bear market; we're more likely in the second month of a 3- to 6-month bear market. That's my optimistic assessment of the market.
On November 17th, I mentioned that the market might be entering a denial phase. I anticipated another round of decline, possibly this week or in two months, after which the market would begin to form a range, ultimately leading to a better market environment in 2026.
Altcoin will lose all meaning because the fair value of these assets is almost zero.
The market is trying to find the fair value of ETH, and the price may stabilize around $2,500. The Ponzi effect once drove up the price of ETH, but this effect is now gradually fading.
If ETH falls below $3,000, it could drag Bitcoin down with it.
The biggest risk for most people is their inability to leave the market; being able to control one's investment impulses is an advantage. The current cryptocurrency market is more like a "loser's game," where most people will only keep losing money, so the best way to win is not to participate.
The current market environment is in Hard Mode and PvP mode, so the best strategy is probably to maintain a cash position and accumulate funds.
It's time to slow down, accumulate quality assets, and focus on airdrop farming.
Even if you have recently suffered losses, don't give up easily. Persist and believe in yourself.
I closed my short position in ETH.
Taiki Maeda:
IshortEthereum (ETH) and Altcoin over the past two months, making over $570,000. In this video, I'll share my views on the current market and why I believe ETH and Altcoin are still in a very, very difficult situation.
I have closed my short position in ETH. I've been short ETH for the past two months. I initially short$1 million worth of ETH around $4150, making some profit; then I added another $1.5 million to the short position at $3387. At that time, my profit and loss (P&L) was approximately $268,000, which I closed last Friday. This brings my total profit over the past two months to approximately $578,000. In addition, as a player focused on yield and airdrop mining, I'm also involved in Variational, a perpetual contract platform that I believe has great potential.
So why did I choose to take profits at this time?
The main reason is that I still believe the price of ETH may fall further, which I will explain in detail later. However, when I started short ETH around $4150, my target was to wait for it to drop below $3000. Now, it has indeed fallen below that level, and I believe I have captured the most profitable part of this move. Short ETH and some Altcoin has been very easy over the past two months; simply holding a short position allowed me to earn funding fees and also benefit from the price decline. However, I now feel that the risk and reward in the market have become more balanced, so I have decided to reduce my position size, slow down my trading, remain on the sidelines, and enter a strategy of preserving capital.
ETH has fundamental flaws.
Taiki Maeda:
I'm not being nitpicky. I have no problem with the Ethereum mainnet; I enjoy using it and L2s. ETH has done a lot of good things, but as an asset, I do think it has some fundamental flaws. Unless things change, you can completely ignore ETH as an investment for the next 5 to 10 years as a cryptocurrency investor. Short or long on ETH is fine as a trading tool, but from a long-term investment perspective, there's no truly solid investment logic for ETH. Its market performance over the past 5 years has proven that ETH has consistently underperformed expectations. Aside from so-called "hope" and the "copium," there's no compelling reason to change ETH's performance trajectory as an asset.
I liken buying ETH to the experience of touching a hot stove as a child. You think, "Ouch, that hurts! I have a blister! I'll never touch a hot stove again!" Through this experience, you learn not to touch a hot stove. ETH is like that hot stove, but people keep going back to it because they feel, "This is Ethereum, I have to hold it." In reality, no one is forcing you to own ETH. Many people seem to think ETH is an indispensable asset in cryptocurrency, but I don't think so. If you can overcome the psychological barrier of not considering ETH investment, I believe it will make your decision-making much simpler, reduce your stress levels, and may even extend your life expectancy.
Why is ETH bearish?
Taiki Maeda:
I believe the current market performance is largely in line with expectations. Even if you are bullish on ETH, it's essential to understand bearish perspectives, as focusing solely on bullish information can leave you unprepared when the market reverses. I recommend maintaining a balance in your information intake, listening to both bullish and bearish analyses to make more informed decisions. Ultimately, everyone is responsible for their own financial decisions.
I discussed my bearish rationale for ETH last October. At that time, I predicted that the October 10th liquidation event would be seen as the starting point of an ETH bear market. While this view was quite controversial at the time, October 10th was indeed a significant turning point, as it revealed the lack of fundamental value in many crypto assets, with Altcoin beginning to decline significantly. Now, there's not much reason to hold Altcoin. If the Altcoin market has indeed "collapsed," this impact will spill over to ETH, as the Altcoin slump cannot support ETH's valuation of over $500 billion.
On October 10th, I predicted two things:
DeFi TVL will decrease. TVL may decline due to hacking incidents and decreased investor confidence in on-chain Altcoin, while the price of ETH may also fall.
Stablecoin supply growth is slowing. Stablecoin supply growth typically stems from on-chain yield opportunities. However, when people stop buying Altcoin, stablecoin yields drop rapidly, and the on-chain risk-reward ratio deteriorates. As yields decline, deposits in DeFi projects decrease while withdrawals increase, further exacerbating market pressures.
As a growth asset, Ethereum (ETH) is valued at approximately $360 billion, thus requiring corresponding metrics to support this valuation. However, ETH's market capitalization is approximately $357 billion, but its annualized revenue is only $300 million, meaning its market capitalization is more than 1000 times its annualized revenue. If valued according to the standards of technology platforms, ETH's valuation is clearly too high, and current metrics fail to support this.
The total value locked (TVL) in DeFi is showing a Double Top pattern, a worrying sign. For a growth asset, this metric should be consistently rising, not showing signs of peaking. Stablecoin market capitalization also appears to be nearing its peak, and as I've mentioned before, future growth may slow. The annualized growth of stablecoins is projected to fall to $30-40 billion, or even as low as $20 billion, over the next 12 months. If these key metrics fail to continue growing, then ETH's valuation appears overvalued.
This phenomenon can be explained by negative reflexivity. In the crypto market, price drops not only reduce buyers but also attract more sellers because price declines typically indicate deteriorating on-chain fundamentals, which in turn further depress prices. This cycle leads to a collapse in investor confidence. When asset prices fall by more than 30%, the conviction of most cryptocurrency holders crumbles, ultimately leading them to sell their assets and accelerating the market's further decline.
Four-year cycle
Taiki Maeda:
Most crypto assets don't have cash flow, so they are traded primarily around narratives, hype, and beliefs, and price drops kill those things.
If you ask me, I don't entirely believe in Bitcoin's four-year cycle; this pattern will eventually break, and this might be the time. However, I do believe that Ethereum and Altcoin' four-year cycles will repeat themselves, and I've staked my reputation on that, because these assets have virtually no economic value.
I introduced the concepts of "time decay" and "belief decay": if investors expect a fourth-quarter surge (Q4 pump), but the surge fails to materialize over time, their belief in this surge gradually fades. Ultimately, holding Altcoin becomes meaningless because the fair value of these assets is virtually zero.
I remain very bearish on ETH. I've seen many people buying severely overvalued "vaporware" based solely on the assumption that "Q4 is always bullish." Therefore, I believe these investors will be shaken out of the market if there's no upward movement in Q4. I observed a significant outflow of marginal sellers from the market, hence my short. It now appears that most of these sellers have been eliminated by the market.
DAT foam bursting
Taiki Maeda:
Currently, the market appears to be entering a bottoming-out phase, a process that could last for several months. I don't believe we'll experience a 12-month bear market, but rather are more likely in the second month of a 3- to 6-month bear market—this is my optimistic assessment of the market.
I believe a significant factor exacerbating the market downturn was the bursting of the DATs (Digital Asset Treasury Companies) bubble. David Bailey's assessment seems somewhat unsound, even containing typos in his 10Q filing. These assets had seen prices surge from $1 to $30, then to $50, ultimately leading to substantial capital losses.
Taking MicroStrategy's MNAV (Net Asset Value Multiple) as an example, its multiple was close to 1 at the time, indicating a decrease in speculative demand for leveraged Bitcoin. The MNAV trend is similar to the market situation in 2021-2022, a period not suitable for long on cryptocurrencies. Currently, the market is experiencing a negative feedback effect. According to Bloomberg, MicroStrategy may be delisted from Nasdaq, which would be a serious blow to them. Meanwhile, I believe most other DATs are also struggling to survive.
Regarding ETH, Tom Lee's ETH digital asset trust, Bitmine, was launched on June 30th, when ETH was priced at approximately $2,500. The price of ETH subsequently surged from $2,500 to $4,900, nearly doubling, and the market is now retracing that gain. They have been continuously buying ETH, with an average cost of around $4,000, totaling $10 billion in purchases. This presents an excellent opportunity for ETH holders to exit, and a good entry point for short.
Currently, the market is trying to find the fair value of ETH. My intuition is that the price will fall further, but it may also stabilize around $2,500, as the cost basis for DATs is approximately between $2,000 and $2,500. The Ponzi effect once drove up the price of ETH, but this effect is now gradually fading.
Where is the bottom?
Taiki Maeda:
I'm not overly pessimistic, but I do believe the market is nearing its bottom. While I don't have a particularly clear view on Bitcoin's trajectory, the market structure for ETH and Altcoin remains challenging. Their valuations are still high, and fundamental metrics show no signs of growth. Value buyers won't easily enter the market until a true bottom is found.
From a supply and demand perspective, overall demand for cryptocurrencies is currently declining. On one hand, market purchasing power has weakened significantly due to investor capitulation and the premature consumption of demand by DATs. On the other hand, the supply of cryptocurrencies is constantly increasing, including new Initial Coin Offerings (ICOs), more token releases, unlocking by teams and investors, and token emissions. Decreasing demand and increasing supply ultimately lead to price declines. This is why the prices of ETH, Solana, and other L1s are falling, as the market is trying to find a reasonable fair value for these assets, and the bubble has burst.
There are typically two main reasons to buy cryptocurrencies: momentum trading (buying high and selling even higher in a bull market, regardless of valuation) and valuation-based investing (buying undervalued assets). However, neither of these reasons holds true now. Market momentum has clearly stalled, DATs are underperforming, and prices remain weak. If we look at L1s, L2s, and DeFi projects, their prices haven't entered value territory. This is why I believe market prices are likely to continue fluctuating and trending lower.
My bearish logic is that if ETH falls below $3,000, it could drag Bitcoin down with it. As long as we maintain a rational analysis of the market, valuations, and indicators, the price is likely to continue its downward trend. On October 30th, I predicted that ETH would fall below $3,000 and find a bottom in the $2,000 range, or even briefly dip below $2,000. I still stand by this assessment; although ETH may not have bottomed out yet, the market could take several months to reach new lows. I believe we are still in a downtrend.
I'm unsure whether the market is currently in phase four or five. For the past two months, I believe we've been in phase four, characterized by massive liquidations where every instance of positive news was quickly reversed, causing significant losses for long. If you're optimistic about the market, perhaps we've entered a downtrend and may consolidate for the next three to four months. However, the current market environment is not conducive to taking excessive risks. I believe we're closer to the bottom than the top.
On November 17th, I mentioned that the market might be entering a denial phase. I anticipated another round of decline, possibly this week or in two months, after which the market would begin to form a range, ultimately leading to a better market environment in 2026.
Cryptocurrencies lack cash flow; their trading relies heavily on investor sentiment and human behavior. When I short ETH and Altcoin in October and November, I was challenging the market consensus of a "Q4 rally." Now that the consensus has shifted to a "12-month bear market," should I challenge that view and start buying? My answer is that I would consider buying if prices fall further. I believe cryptocurrencies will experience a K-shaped recovery (meaning a divergence between high-quality and low-quality assets). Bitcoin and some tokens with buyback mechanisms may recover, but most tokens may have already disappeared and will never recover. I advise investors to carefully examine their holdings and ask themselves, "Is there any possibility of recovery for these coins I hold?" The answer is likely no, so sell them decisively.
Portfolio and projects I am currently following
Taiki Maeda:
I want to talk about my portfolio and the strategy I'm currently employing. The market may fall further, but even so, we still have several months to choose from when to buy at low prices, so I'm not going to take a high-risk investment approach.
In investing, preserving capital is just as important as making a profit. The real "buy the dip" season is when you wait for even lower prices. Avoiding a 20% drop in your portfolio is equivalent to capturing a 25% gain. In fact, bear markets are the best time to make money; simply buy low and then relax and enjoy your vacation.
For many, the biggest risk lies in being unable to leave the market. Currently, liquidity in the cryptocurrency ecosystem is gradually dwindling, and now may not be the best time to participate. Being able to control one's investment impulses is an advantage. The current cryptocurrency market is more like a "loser's game," where most people will only continue to lose money, so the best way to win is not to participate, or simply to remain on the sidelines.
The cryptocurrency market is losing liquidity, like a leaky bucket. Trying to extract liquidity from the market is undoubtedly going against the market trend. The current market environment is Hard Mode and PvP mode; the best strategy might be to maintain cash positions and accumulate funds, as experienced investors in the market are vying for limited resources.
I believe it's time to slow down, accumulate quality assets, and focus on airdrop farming. This is also my goal; currently, my portfolio is almost 100% cash (excluding illiquid positions).
I'm currently monitoring Variational, Lighter, USDi, Tyro, and Poly Market. Lighter tokens are currently worth $80, and I was lucky enough to acquire them, which was more of a matter of luck than skill. Variational might also be a project worth watching. As more people leave the cryptocurrency market, it's good for investors like us because there's less competition. The best opportunities to profit tend to emerge when the market is generally down. I believe that for retail investors, the primary, reliable way to earn cryptocurrency isn't simply by buying or trading, but through airdrops, as new tokens are typically issued at very high valuations.
I also participated in USDi mining, and while the returns have decreased, I'm still earning 8.5% in stablecoin yields and points. I've invested over $500,000 and so far earned $10,000, while also earning points for future token generation events. Stablecoin mining is a relatively reliable strategy, provided you do your due diligence. I also participated in Tyro, a project on the Injective chain and an instance of Kraken Layer 2. This project is low-risk, and while the returns aren't high, you still earn points. As for Poly Market, I didn't perform well, losing $20,000 on war miles.
Final words of encouragement
Taiki Maeda:
Many people praise me as the "Japanese GCR" and even call me the "Asian quantitative trader." But frankly, when I released a video in August of this year, I felt like I had been eliminated by the market, and I was very frustrated with myself during that period.
What I want to say is, even if you've recently experienced losses, don't give up easily. Persist and believe in yourself. There will always be winners and losers in the market, and what we can do is increase our chances of becoming a winner through hard work and perseverance. The market isn't that simple; to succeed, you need to put in more effort and surpass your competitors.
Even when feeling frustrated, quickly forget past failures and focus on the future. The cryptocurrency market rewards persistent investors; as long as you manage risk, you won't suffer utter failure. The market is currently entering a bottoming phase, and while there may be another dip, overall, we are closer to the bottom than the top. Therefore, perhaps now is the time to start gradually increasing your risk exposure.
That being said, I remain concerned. I'd like to be bullish, but there isn't yet a sufficient reason for me to make a large-scale purchase. However, if the market experiences another downturn, I would consider bidding for assets like Bitcoin and Hyperliquid. To catch the lows, you have to stay on the lookout when people are liquidating; to seize opportunities, you have to act decisively when people lose confidence in cryptocurrencies, such as by participating in Hyperliquid.
The key is to seize new opportunities in the market and always maintain patience and perseverance. I hope the purpose of this video is not simply to vent my frustration with ETH, but to remind everyone that now is not the time to be overly bearish, but rather a time to remain optimistic about the future. I am bullish on the market and believe I can buy quality assets at lower prices.
