Why am I optimistic about the market outlook after profiting $580,000 from shorting ETH?
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Why am I optimistic about the market outlook after profiting $580,000 from shorting ETH?
I think we won't experience a 12-month bear market, but are more likely in the second month of a 3 to 6 month bear market.
Navigating Web3 tides with focused insightsCompilation & Translation: TechFlow
Speaker: Taiki Maeda
Podcast Source: Taiki Maeda
Original Title: I Made $578,000 Shorting ETH. What I’m Doing Next.
Release Date: November 26, 2025
Key Takeaways
In just two months of bear market trading, Taiki Maeda earned $578,000 by shorting the market. In this podcast, he dives deep into potential trends for the crypto market over the coming months and advises investors to prioritize capital preservation over chasing high returns. Additionally, he shares his current strategies in stablecoin yield farming and airdrop farming, offering listeners practical investment insights.
Highlights Summary
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For the past two months, I’ve been shorting ETH. I initially shorted $1 million worth of ETH at around $4,150 and made some profit; then added another $1.5 million short position at $3,387. My total earnings over the past two months were approximately $578,000.
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Why did I choose to take profits now? I still believe ETH’s price may fall further, but my original target was ETH reaching $3,000.
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Why was I bearish on ETH? If the altcoin market has already “collapsed,” that impact will spill over to ETH, because the depressed state of altcoins cannot justify ETH’s valuation above $50 billion.
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I believe ETH has fundamental flaws, and unless things change, as a cryptocurrency investor, you can completely ignore ETH as an investment asset over the next 5 to 10 years.
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If you can overcome the psychological barrier of not investing in ETH, I believe it will simplify your decision-making, reduce stress, and might even extend your life expectancy.
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I don’t think we’ll face a 12-month bear market; instead, we’re likely in the second month of a 3- to 6-month bear market—that’s my optimistic view of the market.
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On November 17, I mentioned the market might be entering the denial phase. Another downturn is expected—possibly this week or within two months—after which the market will begin forming a range, eventually leading to a better market environment in 2026.
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Altcoins will lose all meaning because these assets’ fair value is nearly zero.
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The market is trying to find ETH’s fair value, which could stabilize around $2,500. A Ponzi effect previously inflated ETH’s price, but that effect is now fading.
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If ETH falls below $3,000, it could drag Bitcoin down with it.
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The biggest risk for most people is their inability to step away from the market. Being able to control your investment impulses is an advantage. The current crypto market is more like a “loser’s game,” where most people keep losing money—so the best way to win is simply not to play.
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The current market environment is Hard Mode and Player-vs-Player (PVP) mode—the best strategy might be holding cash and accumulating capital.
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It’s time to slow down, accumulate quality assets, and focus on airdrop farming.
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Even if you’ve recently suffered losses, don’t give up easily—persist and believe in yourself.
Closing My ETH Short Position
Taiki Maeda:
Over the past two months, shorting Ethereum (ETH) and altcoins has yielded over $570,000 in profit. In this video, I’ll share my views on the current market and explain why I believe ETH and altcoins are still in very, very tough shape.
I have now closed my ETH short position. For the past two months, I’ve been shorting ETH. I initially shorted $1 million worth of ETH at around $4,150 and made some profit; later added a $1.5 million short at $3,387. At one point, my P&L was about $268,000, and I exited the position last Friday. That brings my total profit over the past two months to roughly $578,000. Also, as someone focused on yield and airdrop farming, I’m involved with Variational—a perpetuals platform I believe has strong potential.
So why did I decide to take profits now?
Mainly because I still think ETH’s price may go lower—I’ll elaborate on that shortly. But when I started shorting ETH at around $4,150, my goal was to ride it down below $3,000. Now that it’s breached that level, I believe I’ve captured the easiest part of this move. Over the past two months, shorting ETH and some altcoins was quite straightforward—just hold the short, earn funding fees, and benefit from price declines. However, I now feel the risk-reward balance has shifted, so I’ve decided to reduce exposure, slow down, stay cautious, and shift into capital preservation mode.
ETH Has Fundamental Flaws
Taiki Maeda:
I’m not being intentionally harsh—I have no issue with the Ethereum mainnet. I enjoy using ETH and L2s; Ethereum has done many great things. But as an asset, I do see some fundamental flaws. Unless something changes, as a crypto investor, you can completely ignore ETH as an investment over the next 5 to 10 years. Trading ETH long or short is fine as a tactical tool, but from a long-term investment perspective, ETH lacks a solid rationale. The past five years have shown ETH consistently underperforming expectations. Beyond “hopium” and “copium,” there are no strong arguments to alter ETH’s trajectory as an asset.
I compare buying ETH to touching a hot stove as a child—you think, “Wow, that hurts, I got blisters, I’ll never touch it again.” That experience teaches you not to repeat it. ETH is like that hot stove, yet people keep going back, thinking, “It’s Ethereum, I must hold it.” In reality, nobody forces you to own ETH. Many seem to believe ETH is indispensable in crypto, but I don’t agree. If you can overcome the mental block of ignoring ETH, I believe it will simplify your decisions, reduce stress, and might even extend your life expectancy.
Why I’m Bearish on ETH
Taiki Maeda:
I believe the current market behavior is largely as expected. Even if you’re bullish on ETH, understanding bearish perspectives is crucial—because relying only on bullish narratives can leave you unprepared when the market turns. I recommend maintaining balanced information intake: listen to both bulls and bears to make smarter decisions. After all, everyone must ultimately take responsibility for their financial choices.
My bearish logic on ETH was outlined last October. Back then, I predicted that October 10 would come to be seen as the start of ETH’s bear market. While controversial at the time, October 10 was indeed a key moment—it revealed that many crypto assets lack fundamental value, and altcoin valuations began falling sharply. Today, there’s little justification left for holding altcoins. If the altcoin market has “collapsed,” that effect will ripple to ETH, because the weakness in altcoins cannot support ETH’s valuation above $500 billion.
On October 10, I forecast two things:
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DeFi TVL will decline. Due to hacks and declining confidence in on-chain altcoins, TVL may drop—and ETH’s price will follow.
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Stablecoin supply growth will slow. Stablecoin expansion usually comes from on-chain yield opportunities. But when people stop buying altcoins, stablecoin yields collapse quickly, worsening the on-chain risk-reward dynamic. As yields fall, deposits in DeFi projects shrink while withdrawals rise, increasing downward pressure on the market.
ETH, valued at around $360 billion as a growth asset, needs supporting metrics to justify that valuation. Yet ETH’s market cap is ~$357 billion while its annualized revenue is only $300 million—over 1,000x revenue. By tech platform standards, that’s clearly excessive, and current data doesn’t support it.
DeFi Total Value Locked (TVL) shows a double top pattern—this is not encouraging. For a growth asset, key metrics should keep rising, not show topping signs. Stablecoin market cap also appears near a peak—I’ve said future growth could slow. Over the next 12 months, stablecoin annual growth may drop to $30–40 billion, or even as low as $20 billion. If these core indicators fail to grow, ETH’s valuation becomes unjustifiable.
This can be explained by negative reflexivity: in crypto markets, price declines don’t just reduce buyers—they attract more sellers, because falling prices often signal deteriorating on-chain fundamentals, which further depress prices, creating a cycle that erodes investor confidence. When asset prices drop more than 30%, most holders’ conviction breaks, prompting them to sell—accelerating the downturn.
The Four-Year Cycle
Taiki Maeda:
Most crypto assets generate no cash flow, so they trade primarily on narrative, hype, and belief—and falling prices kill all three.
If you ask me, I don’t fully believe in Bitcoin’s four-year cycle. This pattern will eventually break—and this time might be it. However, I do believe Ethereum and altcoins will replay their four-year cycle, and I’ve staked my reputation on it, because these assets themselves have almost no economic value.
I introduced the concepts of “time decay” and “belief decay”: if investors expect a Q4 pump but it fails to materialize over time, their belief in it fades. Eventually, holding altcoins will become meaningless, because their fair value is nearly zero.
I remain strongly bearish on ETH. I see many people buying severely overvalued “vaporware,” justifying it with “Q4 is always bullish.” So I believe if Q4 doesn’t rally, those investors will get washed out. I observed far more marginal sellers than buyers in the market, so I went short. Now, it seems most of those sellers have already been eliminated.
DAT Bubble Burst
Taiki Maeda:
Currently, the market is entering a bottoming phase, which could last several months. I don’t think we’ll face a 12-month bear market; instead, we’re likely in the second month of a 3- to 6-month bear market—this is my optimistic take.
A major factor accelerating the downturn is the bursting bubble of DATs—Digital Asset Treasury Companies. David Bailey seemed careless—even making typos in 10Q filings. These assets surged from $1 to $30, then $50, ultimately causing massive capital destruction.
Take MicroStrategy’s MNAV (Net Asset Value multiple): it was close to 1, signaling waning speculative demand for leveraged Bitcoin. The MNAV trend resembles the 2021–2022 period, which wasn’t suitable for going long crypto. Now, the market is experiencing negative reflexivity. Bloomberg reported MicroStrategy might get delisted from Nasdaq—a serious blow. Meanwhile, I believe most other DATs are also unsustainable.
Regarding ETH, Tom Lee’s ETH-focused Digital Asset Trust, Bitmine, launched June 30 when ETH was ~$2,500. ETH then rose from $2,500 to $4,900—nearly doubling—before now retracing. They kept buying ETH at an average cost of ~$4,000, totaling $10 billion. This is a perfect exit opportunity for ETH holders—and a prime entry window for shorts.
Right now, the market is trying to find ETH’s fair value. My instinct says it may fall further, but could stabilize around $2,500, since DATs’ accumulation cost is roughly between $2,000 and $2,500. A Ponzi effect once inflated ETH’s price, but that effect is now fading.
Where Is the Bottom?
Taiki Maeda:
I’m not overly pessimistic, but I do believe we’re nearing a bottom. While I don’t have a clear view on Bitcoin’s path, the market structure for ETH and altcoins remains severe. Their valuations are still high, with no sign of improvement in fundamentals. Value buyers won’t step in until a true bottom is found.
From a supply-demand perspective, overall crypto demand is currently declining. Investor capitulation and early demand exhaustion by DATs have weakened buying power. Meanwhile, crypto supply keeps increasing—from new ICOs, token unlocks, team/investor vesting, and emissions. Falling demand plus rising supply leads to lower prices. That’s why ETH, Solana, and other L1s are all dropping—the market is seeking fair value as the bubble bursts.
Typically, people buy crypto for two reasons: momentum trading (buying high in bull markets, selling higher, regardless of valuation), or valuation-based buying (acquiring undervalued assets). But neither reason holds now. Momentum has clearly stalled, DATs are underperforming, and prices remain weak. Looking at L1s, L2s, and DeFi projects, none have entered value territory. That’s why I believe prices may continue to drift lower.
My bearish thesis is: if ETH drops below $3,000, it could pull Bitcoin down with it. Maintaining rational analysis of market conditions, valuations, and metrics, prices are likely to keep grinding lower. On October 30, I predicted ETH would fall below $3,000 and find a bottom in the $2,000 range, possibly briefly dipping below. I still stand by that—though ETH may not have bottomed yet, it might take months to reach new lows. I believe we’re still in a downtrend.
I’m unsure whether we’re in stage four or five. Over the past two months, I thought we were in stage four—marked by mass liquidations, where every positive news triggered sharp reversals, hurting longs badly. If you’re optimistic, maybe we’ve entered the despair phase, with sideways consolidation expected for three to four months. Regardless, this isn’t a good environment for taking big risks. I believe we’re closer to the bottom than the top.
On November 17, I said the market might be entering the denial phase. I expect another leg down—possibly this week or within two months—followed by range formation, eventually leading to a healthier market in 2026.
Crypto has no cash flows; trading depends heavily on investor sentiment and human behavior. When I shorted ETH and altcoins in October and November, I was challenging the consensus of a “Q4 pump.” Now the consensus is a “12-month bear market”—should I challenge that and start buying? My answer: if prices fall further, I’ll consider starting to buy. I believe crypto will undergo a K-shaped recovery—quality assets will diverge from junk. Bitcoin and tokens with buyback mechanisms may recover, but most tokens may be dead forever. I urge investors to review their portfolios: “Is there any chance my holdings will recover?” The answer is likely no—so sell them decisively.
Portfolio and Projects I’m Watching
Taiki Maeda:
I want to discuss my portfolio and current strategies. The market may fall further, but even so, we have months to potentially buy low—so I won’t adopt high-risk approaches.
In investing, preserving capital is as important as making profits. The real alt season is waiting for lower prices to buy. Avoiding a 20% portfolio drawdown is equivalent to capturing a 25% gain. In fact, bear markets are the best time to make money—just buy cheap, then go on vacation.
For many, the biggest risk is their inability to step away from the market. Liquidity is draining from the crypto ecosystem—now may not be the best time to participate. Controlling your trading impulses is an advantage. The current crypto market is a “loser’s game”—most people just keep losing money, so the best way to win is not to play, or simply stay on the sidelines.
Crypto liquidity is evaporating like a leaking bucket. Trying to extract liquidity means fighting the trend. The current market environment is Hard Mode and Player-vs-Player (PVP) mode—the best strategy may be holding cash and accumulating funds, as seasoned players fight over shrinking resources.
I believe it’s time to slow down, accumulate quality assets, and focus on airdrop farming (airdrop farm). That’s my goal—my portfolio is nearly 100% cash right now (excluding illiquid positions).
I’m watching Variational, Lighter, USDi, Tyro, and Poly Market. Lighter points are now worth $80—I was lucky to get them, more luck than skill. Variational could also be promising. As more people exit crypto, it benefits investors like us—less competition. When the market is gloomy, the best farming opportunities often emerge. I believe for retail investors, the most reliable way to earn crypto isn’t simple buying or trading, but through airdrops—since new tokens often launch at very high valuations.
I’m also farming USDi—yields have dropped, but I still earn 8.5% on stablecoins plus points. I’ve deployed over $500,000, earned $10,000 so far, and collected points toward future token events. Stablecoin farming is relatively reliable with proper due diligence. I’m also in Tyro, a project on Injective and a Layer 2 instance of Kraken. It’s low-risk, modest yield, but offers points. As for Poly Market, I performed poorly—lost $20,000 on war miles.
Final Words of Encouragement
Taiki Maeda:
Many call me the “Japanese GCR” or even the “Asian quant trader.” But honestly, back in August when I posted a video, I felt completely wiped out—I was deeply frustrated with myself.
What I want to say is, even if you’ve recently suffered losses, don’t give up—persist and believe in yourself. There will always be winners and losers in the market. All we can do is work hard and persist, increasing our odds of winning. Markets aren’t simple—you need to outwork your competition to succeed.
Even when discouraged, quickly forget past failures and focus on the future. Crypto markets reward persistent investors. As long as you manage risk, you won’t face total ruin. The market is now entering a bottoming phase—there may be another leg down, but overall, we’re closer to the bottom than the top. So perhaps it’s time to gradually increase risk exposure.
That said, I’m still cautious. I want to be a bull, but I don’t yet have enough justification for large-scale buying. However, if the market sees another drop, I’ll consider bidding for assets like Bitcoin and Hyperliquid. To catch the bottom, you must watch when others get liquidated; to seize opportunities, you must act boldly when people lose faith in crypto—like participating in Hyperliquid.
The key is spotting new opportunities in the market, while staying patient and resilient. I hope this video isn’t just ranting against ETH, but a reminder: now isn’t the time to be overly bearish, but to stay optimistic about the future. I’m bullish on the market and believe I can buy quality assets at lower prices.
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