"I don't think we will experience a bear market lasting 12 months, but it's more likely that we are in the second month of a 3 to 6 month bear market."
Compiled & Edited by: Deep Tide 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 Summary
In just two months of bear market trading, Taiki Maeda earned $578,000 by shorting. In this episode of the podcast, he delves into the potential trends in the cryptocurrency market over the coming months and advises investors to prioritize preserving their principal rather than chasing high returns. Additionally, he shares his strategies for stablecoin and airdrop mining, providing listeners with more practical investment ideas.
Highlights
For the past two months, I have been shorting ETH. I shorted $1 million worth of ETH at around $4150 and made some profit; then, I added another $1.5 million short position at $3387. 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 ETH's price may decline further, but my short target is for ETH to reach $3000.
Why was I bearish on ETH before? If the altcoin market has already "collapsed," this impact will transmit to ETH, as the sluggish state of altcoins cannot support ETH's valuation above $500 billion.
I believe ETH has fundamental flaws; unless circumstances change, as a cryptocurrency investor, you can completely ignore ETH as an investment target over the next 5 to 10 years.
If you can overcome the psychological barrier of not considering ETH as an investment, I believe it will simplify your decision-making, reduce your stress levels, and may even extend your life expectancy.
I don't think we will experience a bear market lasting 12 months, but it's more likely that we are in the second month of a 3 to 6 month bear market, which is my optimistic judgment of the market.
On November 17, I mentioned that the market might be entering a denial phase. The market is expected to experience another wave of decline, which may occur this week or in two months, after which it will begin to form a range, ultimately leading to a better market environment in 2026.
Altcoins will lose any significance, as the fair value of these assets is nearly zero.
The market is trying to find the fair value of ETH, and the price may stabilize around $2500. The Ponzi effect had previously driven up ETH's price, and now this effect is gradually fading.
If ETH falls below $3000, it may drag Bitcoin down with it.
Most people's biggest risk is their inability to exit the market; being able to control your investment impulses is an advantage. The current cryptocurrency market resembles a "loser's game," where most people just keep losing money, so the best way to win is not to participate.
The current market environment is in hard mode and player versus player (PVP) mode; the best strategy may be to maintain cash positions 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.
Closing My ETH Short Position
Taiki Maeda:
I have shorted Ethereum (ETH) and altcoins over the past two months, making over $570,000. In this video, I will share my views on the current market and why I believe the situation for ETH and altcoins remains very, very difficult.
I have closed my short position on ETH. For the past two months, I have been shorting ETH. I had shorted $1 million worth of ETH at around $4150 and made some profit; then, I added another $1.5 million short position at $3387. At that time, my position's profit and loss (P&L) was about $268,000, and I closed it last Friday. So, my total profit over the past two months is approximately $578,000. Additionally, as a player focused on yield and airdrop farming, I am also participating in Variational, which I believe is a very promising perpetual contract platform.
So why did I choose to take profits at this time?
The main reason is that I still believe ETH's price may decline further, which I will elaborate on later. But when I started shorting ETH at around $4150, my target was to wait for it to drop below $3000. Now that it has indeed fallen below that level, I believe I have captured the easiest part of this market trend to profit from. Over the past two months, shorting ETH and some altcoins has indeed been very easy; just holding the short position not only earns funding fees but also benefits from the price decline. However, I now feel that the risk and reward in the market have become balanced, so I decided to* reduce my position*, slow down my operations, maintain a wait-and-see approach, and enter a mode of preserving my principal.
Fundamental Flaws of ETH
Taiki Maeda:
I am not intentionally being critical; I have no issues with the Ethereum mainnet, I enjoy using the ETH mainnet and L2s, and ETH has indeed done a lot of good things, but as an asset, I do believe it has some fundamental flaws. Unless circumstances change, as a cryptocurrency investor, you can completely ignore ETH as an investment target over the next 5 to 10 years. Shorting or going long on ETH as a trading tool is fine, but from a long-term investment perspective, ETH does not have a truly defensible investment logic. The market performance over the past 5 years has proven that ETH's performance has consistently fallen short of expectations. Aside from the so-called "hopium" and "copium," there are no strong reasons to change the performance trajectory of ETH as an asset.
I compare buying ETH to the experience of touching a hot stove as a child; you think, "Wow, that hurts, I got a blister, I will never touch a hot stove again." Through such experiences, you learn not to touch the hot stove again. And ETH is like that hot stove, but people keep going back to touch it again and again because they feel, "This is Ethereum, I must hold it." In fact, no one is forcing you to own ETH. Many people seem to think that ETH is an indispensable asset in cryptocurrency, but I do not believe so. If you can overcome the psychological barrier of not considering ETH as an investment, I believe it will simplify your decision-making, reduce your stress levels, and may even extend your life expectancy.
Why Bearish on ETH
Taiki Maeda:
I believe the current market performance is basically in line with expectations. Even if you are bullish on ETH, it is necessary to understand the bearish perspective because if you only focus on bullish information, you may be caught off guard when the market turns. I recommend maintaining a balanced information intake, listening to both bullish opinions and bearish analyses, so you can make more informed decisions. After all, everyone ultimately needs to be responsible for their financial decisions.
Regarding the bearish logic on ETH, I mentioned it last October. At that time, I predicted that people would view the liquidation event on October 10 as the starting point of the ETH bear market. Although this view was quite controversial at the time, October 10 was indeed an important node because it revealed the lack of fundamental value in many crypto assets, and the value of altcoins began to decline significantly. Nowadays, there is not much reason to hold altcoins. If the altcoin market has already "collapsed," this impact will transmit to ETH, as the sluggish state of altcoins cannot support ETH's valuation above $500 billion.
On October 10, I predicted two things:
DeFi TVL would decrease. Due to some hacking incidents and a decline in investor confidence in on-chain altcoins, TVL may decrease, and ETH's price will also drop.
Stablecoin supply growth would slow down. The growth of stablecoin supply usually comes from on-chain yield opportunities. However, when people stop buying altcoins, stablecoin yields will quickly decline, and the risk-return profile on-chain will worsen. As yields decline, deposits in DeFi projects decrease, and withdrawals increase, further exacerbating market pressure.
As a growth asset, ETH's value is about $360 billion, so there need to be corresponding indicators to support this valuation. However, ETH's market cap is about $357 billion, but its annual income is only $300 million, making its market cap over 1000 times its annual income. If we apply the valuation standards of tech platforms, ETH's valuation is clearly too high, and the current indicators have not proven this.
DeFi total locked value (TVL) shows a double top pattern, which is not optimistic. For a growth asset, its indicators should continue to rise, not show signs of peaking. The market cap of stablecoins also seems to be approaching a peak; I have mentioned that future growth may slow down. It is expected that in the next 12 months, the annual growth of stablecoins may drop to $30 billion to $40 billion, or even as low as $20 billion. If these key indicators cannot continue to grow, then ETH's valuation appears too high.
This phenomenon can be explained by negative reflexivity. In the crypto market, price declines not only reduce buyers but also attract more sellers because price declines usually indicate a deterioration in on-chain fundamentals, and the deterioration in fundamentals further depresses prices, creating a cycle that leads to a collapse in investor confidence. When asset prices fall more than 30%, the beliefs of most cryptocurrency holders will collapse, ultimately leading them to sell their assets, accelerating further market decline.
Four-Year Cycle
Taiki Maeda:
Most crypto assets do not have cash flow, so they primarily trade around narratives, hype, and beliefs, and price declines will stifle these things.
If you ask me, I don't fully believe in Bitcoin's four-year cycle; this pattern will eventually be broken, and this time might be when it cracks. However, I do believe that Ethereum and altcoins' four-year cycle will repeat, and I have staked my reputation on it, because these assets have almost no economic value.
I introduced the concepts of "time decay" and "belief decay": if investors expect a Q4 pump but see no rise over time, their belief in such a rise will gradually fade. Ultimately, holding altcoins will lose any meaning, as the fair value of these assets is nearly zero.
I remain very bearish on ETH. I find that many people are buying those severely overvalued "vaporware" concepts, simply because "Q4 is always bullish." So I believe that if there is no rise in Q4, these investors will be washed out of the market. I have observed that there are far more marginal sellers than marginal buyers in the market, which is why I chose to short. It now seems that most of these sellers have already been eliminated from the market.
The DAT Bubble Burst
Taiki Maeda:
Currently, the market is entering a bottoming phase, which may last for several months. I don't think we will experience a bear market lasting 12 months; it's more likely that we are in the second month of a 3 to 6 month bear market, which is my optimistic judgment of the market.
I believe one important factor exacerbating the market downturn is the bubble burst of DATs, or Digital Asset Treasury Companies. David Bailey's attitude seems insufficiently rigorous, even containing typos in the 10Q filings. The prices of these assets once rose from $1 to $30, then to $50, ultimately leading to severe capital losses.
Take MicroStrategy's MNAV (Market Net Asset Value) as an example; at that time, the multiple was close to 1, indicating that the market's speculative demand for leveraged Bitcoin was decreasing. The trend of MNAV resembles the market from 2021 to 2022, a period not suitable for bullish positions in cryptocurrency. Now, the market is experiencing a negative feedback effect. According to Bloomberg, MicroStrategy may be kicked out of Nasdaq, which would be a severe blow for them. Meanwhile, I believe that most other DATs are also struggling to maintain.
Speaking of ETH, Tom Lee's ETH digital asset trust Bitmine was announced on June 30, when ETH's price was around $2500. Subsequently, ETH's price rose from $2500 to $4900, nearly doubling, and now the market is retracting this increase. They continued to buy ETH at an average cost of about $4000, with a total purchase amount of $10 billion. This presents an excellent exit opportunity for ETH holders and a good entry point for short sellers.
Currently, the market is trying to find the fair value of ETH. My intuition is that the price will decline further, but it may also stabilize around $2500, as the cost basis for DATs is around $2000 to $2500. The Ponzi effect had previously driven up ETH's price, and now this effect is gradually fading.
Where is the Bottom?
Taiki Maeda:
I am not overly pessimistic, but I do believe the market is close to the bottom. While I don't have a particularly clear view on Bitcoin's trajectory, the market structure for ETH and altcoins remains severe. Their valuations are still high, while fundamental indicators show no signs of growth; value buyers will not easily enter the market until it finds a true bottom.
From a supply and demand perspective, the overall demand for cryptocurrency is declining. On one hand, due to investors' capitulation and DATs consuming a large amount of demand in advance, the market's purchasing power has significantly weakened; on the other hand, the supply of cryptocurrencies is continuously increasing, including new ICOs, more token releases, team and investor unlocks, and token emissions. Decreased demand and increased 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.
Typically, there are two main reasons for buying cryptocurrency: one is momentum trading (buying high and selling higher in a bull market, without considering valuation), and the other is valuation-based (buying undervalued assets). But now, neither of these buying reasons holds. Market momentum is clearly stagnant, DATs are underperforming, and prices remain weak. If we observe L1s, L2s, and DeFi projects, their prices have not entered the value zone. This is why I believe market prices may continue to oscillate and decline.
My bearish logic is that if ETH falls below $3000, it may drag Bitcoin down with it. As long as we maintain a rational analysis of the market, valuations, and indicators, prices are likely to continue oscillating downward. On October 30, I predicted that ETH's trajectory would break below $3000 and find a bottom in the $2000 range, possibly even briefly dipping below $2000. I still stand by this judgment; although ETH may not have hit bottom yet, the market may need several months to set new lows. I believe we are still in a market downtrend.
I am uncertain whether the market is in the fourth or fifth phase right now. Over the past two months, I believe we have been in the fourth phase, during which large-scale liquidation events occurred, and every time positive news emerged, the market reacted swiftly in reverse, leading to severe losses for long positions. If you are optimistic about the market, perhaps we have entered a stagnation phase, and it may consolidate for three to four months. But in any case, the current market environment is not suitable for taking on excessive risk. I believe we are closer to the bottom than the top.
On November 17, I mentioned that the market might be entering a denial phase. I expect the market will experience another wave of decline, possibly occurring this week or in two months, after which it will begin to form a range, ultimately leading to a better market environment in 2026.
Cryptocurrencies have no cash flow, and their trading relies more on investor sentiment and human behavior. When I shorted ETH and altcoins in October and November, I was countering the market consensus of "Q4 rising." Now the market consensus has shifted to "12 months bear market"; should I counter this view and start buying? My answer is that if prices decline further, I will consider starting to buy. I believe that cryptocurrencies will experience a K-shaped recovery (where quality assets and poor assets will diverge); Bitcoin and some tokens with buyback mechanisms may recover, but most tokens may have completely perished and will never recover. I advise investors to seriously examine their holdings and ask themselves, "Do these coins I hold still have a chance of recovery?" The answer is likely no, so sell them decisively.
Portfolio and Projects I'm Watching
Taiki Maeda:
I want to talk about my portfolio and the strategies I am currently pursuing. The market may decline further, but even so, we still have a few months to choose to buy at low prices, so I will not adopt a high-risk investment model.
In investing, preserving principal and realizing profits are equally important. The real altcoin season is waiting for lower prices to buy in. If you can avoid a 20% shrinkage in your portfolio, it is as effective as capturing a 25% increase. In fact, bear markets are the best time to make money; you just need to buy at low prices and then relax on vacation.
For many people, the biggest risk is the inability to exit the market. Currently, liquidity in the cryptocurrency ecosystem is gradually diminishing, and now may not be the best time to participate in this market. Being able to control your investment impulses is an advantage. The current cryptocurrency market resembles a "loser's game," where most people just keep losing 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 leaking bucket. If you try to extract liquidity from the market, you are undoubtedly going against the market trend. The current market environment is in hard mode and player versus player (PVP) mode; the best strategy may be to maintain cash positions and accumulate funds. Seasoned investors in the market are competing for limited resources.
I believe now is the 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 am watching Variational, Lighter, USDi, Tyro, and Poly Market. Lighter's points are currently valued at $80, and I was fortunate to obtain these points, which is more a result of luck than skill. Variational may also be a project worth paying attention to. As more and more people exit the cryptocurrency market, this is good for investors like us, as competition will decrease. When the market is generally sluggish, the best opportunities for yield often arise. I believe that for retail investors, the most reliable way to earn cryptocurrency is not simply to buy or trade, but through airdrops, as new tokens are often issued at very high valuations.
I am also participating in mining for USDi; currently, the yields have decreased, but I am still earning 8.5% in yields and points on stablecoins. I have invested over $500,000 and have earned $10,000 in profits so far, while also obtaining points for future token generation events. Stablecoin mining is a relatively reliable strategy as long as due diligence is done. I am also involved in Tyro, a project on the Injective chain and an instance of Kraken Layer 2. This project has lower risk; although the yields are not high, I can still earn points. As for Poly Market, my performance has been poor, and I lost $20,000 on war miles.
Final Words of Encouragement
Taiki Maeda:
Many people praise me as "Japan's GCR," even calling me "Asia's quantitative trader." But to be honest, when I released a video in August this year, I felt I had been eliminated from the market, and I was very frustrated with myself during that time.
What I want to say is, even if you have recently suffered losses, do not give up easily; persist and believe in yourself. There will always be winners and losers in the market, and what we can do is work hard and persevere to increase our chances of becoming winners. The market is not that simple; to succeed, you need to put in more effort to outpace 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 can control risk, you will not fall into complete failure. The market is entering a bottoming phase; although there may be another wave of decline, overall, we are closer to the bottom than the top. Therefore, perhaps now is the time to start gradually increasing risk exposure.
That said, I still feel concerned. I want to be bullish, but currently, there are not enough reasons to support large-scale buying. However, if the market experiences the next wave of decline, I will consider bidding for assets like Bitcoin and Hyperliquid. To capture the lows, you must stay alert when people are being liquidated; to seize opportunities, you must act decisively when people lose confidence in cryptocurrencies, such as 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 merely to vent dissatisfaction with ETH but to remind everyone that now is not the time to be overly bearish; it is a moment to remain optimistic about the future. I hold a bullish view of the market and believe I can buy quality assets at lower prices.
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