Key Highlights
- Trend Research unwound a $2 billion leveraged long position in Ethereum, resulting in over $686 million in losses as ETH plummeted from a monthly high of $3,365 to $1,769 on February 5, 2026.
- The firm, a subsidiary of LD Capital, accumulated 636,815 ETH at an average entry price of $3,180 using leverage via Aave, borrowing against stablecoins; their health factor hovered near critical levels (around 1.4).
- A 28% weekly drop in ETH to around $2,080 was driven by heavy U.S. spot ETH ETF outflows, macro uncertainty from a potentially hawkish Federal Reserve, and a $5.4 billion crypto liquidation cascade.
Trend Research, a Shanghai-based cryptocurrency investment firm, has been forced to unwind a massive $2 billion leveraged long position in Ethereum (ETH) in the swift market downtrend. The trade resulted in a devastating loss of over $686 million as ETH slumps from a monthly high of $3,365 to as low as $1,769 on February 5, 2026.
Onchain research and blockchain intelligence platform Arkham highlighted that Trend Research is now absorbing the loss and closing their entire ETH long position. The firm had a long position worth $2 Billion in ETH 8 days ago, but now they are closing the entire position after almost getting liquidated.
Trend Research operates as a secondary investment vehicle under LD Capital, a crypto-focused fund founded by Jack Yi in 2016. The firm, led by entrepreneur Yi Lihua (also known as Jack Yi), had been aggressively bullish on Ethereum throughout late 2025 and into 2026.
In their public statements, the Trend Research team indicated strong conviction that ETH would perform well in the first half of 2026, with plans even floated to deploy an additional $1 billion on price dips. In January, the firm borrowed 9,939 ETH from Aave against USDT, adding the asset to their multi-million dollar portfolio.
Background to Trend Research
The dramatic collapse was meticulously documented through on-chain analysis shared by prominent trader and analyst Daxx in a detailed X post.
He noted that Trend Research built their position using leverage, primarily through the decentralized lending protocol Aave, where ETH served as collateral to borrow stablecoins (mainly USDT) and vice-versa.
The firm’s accumulation began in late 2023 but accelerated significantly during the October 2025 dip and continued into early 2026. At its peak, Trend Research controlled approximately 636,815 ETH, valued at roughly $1.98 billion, with an average entry price near $3,180 per coin.
Now as the firm has reached a critical point, its decision to use leverage amplifies both potential gains and risks, with the position’s health factor on Aave frequently hovering near critical levels (around 1.4, vulnerable below ~1.05). This structure left the fund exposed to rapid liquidation if ETH experienced a sharp decline.
The Market Downturn and Forced Unwind
The crisis unfolded as Ethereum fell roughly 28% in a single week, dropping from levels around $2,800 to the $1,800 range. At the time of publishing, ETH was trading near $2,080—down nearly 23% in the past seven days.
The broader market was gripped by what many are calling a full capitulation event, fueled by heavy outflows from U.S. spot ETH ETFs, macro uncertainty surrounding a potentially hawkish Federal Reserve under nominee Kevin Warsh, and a $5.4 billion liquidation cascade across crypto markets during the week.
These factors led to a thin, falling market locked in substantial realized losses while simultaneously adding selling pressure that exacerbated the downturn.
Trend Research’s portfolio has now contracted sharply and is dominated by remaining staked ETH and stablecoins. The episode serves as a stark reminder of the double-edged nature of leverage in highly volatile crypto markets.
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