A Tornado Cash-funded wallet initiated a $26.2 million leveraged trade on Hyperliquid, longing Bitcoin while shorting Ether at 20x leverage on both legs.
The wallet sourced capital by converting 3,100 ETH into approximately 6.92 million USDC before establishing the positions. Bitcoin traded at $74,533 and Ether at $2,131 at the time of the trade.
The use of Tornado Cash-sourced funds underscores continued reliance on sanctioned mixers for on-chain activity despite the U.S. Treasury Department's August 2022 sanctions against the protocol.
Hyperliquid, a Layer 1 purpose-built for perpetual futures, runs its own BFT consensus to optimize throughput and latency for derivatives trading. The BTC long paired with an ETH short represents a relative value play — capturing alpha from divergence between the two assets rather than betting on overall market direction.
The 20x leverage on this position creates substantial liquidation risk. Current market sentiment, reflected by the Crypto Fear & Greed Index at 29 (Fear), signals caution among participants.
