Holding 600,000 ETH and still adding to the position despite losses, why does Yili Hua dare to bet on ETH in 2026?

Liquid Capital founder Yi Lihua sent a strong signal at the turn of the year: based on short squeeze logic and optimism for the 2026 bull market, he will decisively continue to increase his ETH holdings. This is not just a statement; his Trend Research has already validated this commitment with real money—currently holding 607,598 ETH, worth $1.77 billion. Even with an unrealized loss of $117 million, he continues to add to his position. This is a high-risk gamble, and the underlying logic warrants deep analysis.

What Are the Big Players Doing

Aggressive Accumulation Pace

Yi Lihua’s actions can be described as “crazy.” According to the latest data, Trend Research has withdrawn 27,598 ETH from Binance in the past 7 hours, valued at $83.05 million. His plan is even more aggressive: claiming he will invest $1 billion to buy ETH on dips continuously.

More notably, he employs a looping lending strategy—specifically: buy ETH on spot, deposit ETH into Aave as collateral, borrow USDT, then use USDT to buy more ETH. This amplifies capital efficiency but also increases risk.

His Position Size

This scale makes Trend Research one of the largest ETH bulls in the industry. His continued accumulation indicates a strong conviction in his outlook.

The Logic Behind the Accumulation

Short Squeeze Mechanism

Yi Lihua endorses the “short squeeze logic” proposed by relevant analyses. The current crypto market situation is: ETH futures open interest continues to hit new highs, becoming a dominant price driver. Some platforms’ futures open interest even exceeds spot holdings multiple times.

What does this mean? Once the price breaks through key resistance levels, a large number of short positions will be forced to close, creating a self-reinforcing upward momentum. Conversely, if shorts close too early, they face greater losses later. His logic is: under this structure, the probability of longs winning is higher.

Favorable Macro Environment

He lists several supporting factors:

• The Federal Reserve gradually easing monetary policy, ample liquidity
• The start of a rate cut cycle in 2026
• Improved crypto regulatory environment
• Rapid development of on-chain finance and stablecoin ecosystems

Among these, stablecoins are particularly noteworthy. Data shows that over half of circulating stablecoins are on the ETH chain. This means ETH is not only an asset but also the infrastructure backbone of the entire stablecoin ecosystem.

Attitude Toward Volatility

Yi Lihua is very straightforward: “Similar to the first half of 2025, when ETH was between $1,000 and $2,000, the same operations and expectations apply; I don’t mind a few hundred dollars of fluctuation.” This reflects his time horizon—he is a trend investor, not a short-term trader. From this perspective, current price swings are indeed insignificant.

How Big Is the Risk

Liquidation Risk

The biggest risk in looping lending is liquidation. If ETH prices drop sharply, collateral value declines, potentially triggering liquidation. With Trend Research’s current unrealized loss of $117 million, this risk is no longer theoretical.

According to recent reports, a new short seller has emerged against Yi Lihua’s position—address 0x94d opened a short of 36,281.29 ETH 13 hours ago, with an unrealized loss of $521,000. This indicates that opposing forces are actively betting against him.

Market Reflexivity

Some analyses suggest that Yi Lihua’s “publicly signaling continuous accumulation” could become a contrarian indicator. When everyone knows he’s buying, market reactions might deviate from expectations. This is a common trap in market dynamics.

Time Cost

Even if the logic is sound, if the rebound cycle prolongs, the costs of holding (interest on loans, opportunity costs) will erode gains. From December 29 to now, ETH’s price has fallen from over $3,000 back to around $2,969, indicating that the rebound has not been smooth.

What Else Is He Doing

Besides ETH, Yi Lihua’s asset allocation strategy is:

• Largest position: ETH
• Heavy position: WLFI
• Other holdings: BTC, BCH, BNB

This portfolio reflects his confidence in different assets. ETH is core, WLFI is a key bet, and other mainstream coins serve as diversification.

Summary

Yi Lihua’s actions are definitely worth watching because he is putting real capital behind his judgment. His logic—short squeeze mechanism, macro environment, fundamentals—is not based on wishful thinking. But it’s also a high-stakes gamble: $117 million unrealized loss, liquidation risks from looping leverage, and market reflexivity all test the accuracy of his thesis.

The key question isn’t “Will Yi Lihua make money?” but “Will the market in Q1 2026 unfold as he expects?” If it does, his aggressive approach will be validated as genius; if not, he may face not only paper losses but also liquidation risks. That’s the essence of a high-stakes bet by a big player—high risk, high reward, no middle ground.