GM. This is Dumb Money, the only financial newsletter with a 100% loss rate.
The crypto market decided to remind everyone what leverage does this week. Bitcoin dropped below $80,000. Ethereum followed it down. And 201,000 traders found out what a liquidation feels like in a single day.
Three stories stood out. One involves a six-figure ETH position that lasted fourteen hours. One involves buying calls on a stock that drops after every earnings report. One involves a blockchain that just stopped working.
Here's what we've got today:
🏆 ETH to zero. One trader's $147,000 leveraged long lasted 14 hours.
📉 RDDT calls. The stock drops after every earnings beat. He bought calls anyway.
⛓️ Initia goes dark. A bug let someone mint $2.7M out of thin air.
🍪 The best cope from today's comment sections.
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| TODAY'S DAMAGE REPORT 📊 | |||||
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A federal board just voted unanimously to lend roughly $3 billion to one American mining company.
That loan is bigger than the company's entire market cap. Not half of it. Bigger than the whole thing.
One of those two valuations is wrong, and the papers get signed in the second half of this year.
LOSS OF THE DAY 🏆
Every day we crown one person who made the worst financial decision on the internet.
Today's winner didn't just lose money. He lost money in the same 24 hours that 201,000 other people were also losing money. He was not special. That's the worst part.
Here's the setup. On October 24, Bitcoin dropped below $80,000 for the first time in weeks. ETF outflows of $773 million over two days. Arthur Hayes publicly closing his positions.
The warning signs were everywhere. Our guy saw the dip. He did not see the warning signs.
He opened a 25x leveraged long on ETH at $2,397. Total collateral: $147,000 controlling $3.67 million in exposure.
For context: at 25x leverage, a 4% move in the wrong direction wipes you out completely.
ETH dropped 3.7% over the next fourteen hours. From $2,397 to $2,308. That was enough.
He was liquidated at $2,308. Every dollar of the $147,000 gone.
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POSITION P&L -$147,000.00 ▼ LIQUIDATED - 14 HRS HELD 1H 4H 1D 1W ALL | ||||||||||||||||||||||||
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The single largest ETH liquidation on Binance that day was $11.85 million. Our guy wasn't even the biggest loser. He was one of 201,000.
His post included the line: "I thought the bottom was in."
It was not in. It kept going. It always keeps going.
"I thought the bottom was in. It was not in." Opened 25x long ETH at $2,397 with my entire futures account. $147K collateral. BTC had already dropped below $80K. Arthur Hayes had already tweeted he was closing everything. I thought this was the capitulation moment. Top comment: "Arthur Hayes literally told you he was leaving the building and you walked in."
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| Quick math on 25x leverage: Your $147,000 controls a $3.67 million position. Every 1% move in ETH equals a 25% swing in your account. A 4% drop is game over. That is the margin between solvency and liquidation - less than a slow Tuesday afternoon in crypto. |
He opened the position four hours after Arthur Hayes tweeted "I dumped it all." He read that tweet. He then did the exact opposite.
When the co-founder of BitMEX says he's leaving, it is not a contrarian signal. It is information.
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TODAY'S CASUALTIES 💀
Not everybody can be Loss of the Day. But these two gave it a real shot.
Let's run through the tape.
Casualty #1: The RDDT Earnings Prophet
There's a pattern with Reddit stock that is so obvious it should be illegal to ignore.
RDDT has dropped the day after two of its last three earnings reports. Not because the numbers were bad. Because the numbers were good and the stock usually dropped anyway. Down 21% after Q2. Up 13% after Q1.
Our guy saw this pattern. He acknowledged this pattern. He then bought 100 weekly $180 calls at $3.45 each. Total cost: $34,500.
His thesis: this time would be different. The stock was already down 37% year-to-date. All the bad news was priced in.
One problem: "priced in" is the last phrase spoken before every options account goes to zero.
RDDT kept sliding ahead of the October 29 report. Down 4% on Monday alone. His calls went from $3.45 to $0.12. That's a 96.5% loss before the earnings report even happened.
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POSITION P&L -$33,300.00 ▼ $34,500.00 (-96.52%) All Time 1D 1W 1M 3M ALL | ||||||||||||||||||||||||
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"the earnings haven't even dropped yet and I'm already dead" Bought 100 RDDT $180 weeklies at $3.45 because this time would be different. Stock dropped 4% Monday. Calls are at $0.12. The earnings report is tomorrow and I'm already down 96%. Top comment: "This time was different. You found a way to lose before the event even happened."
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He posted the screenshot with the caption: "the earnings haven't even dropped yet and I'm already dead."
Correct. That is how weekly options work on a stock in freefall.
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Casualty #2: The Initia Early Adopter
This one hurts differently. Because the victim didn't make a bad trade. He made a reasonable deposit into what looked like a functioning blockchain.
And then the blockchain stopped functioning.
On October 23, an attacker found a bug in Initia's MoveVM script caching system. The bug let them bypass security checks and mint tokens that didn't exist. They minted 2 million AUSD. They bridged out $2.7 million.
The Initia team halted the entire chain. L1 and all rollups. Offline.
Our guy had deposited $28,400 into the Initia ecosystem three weeks earlier. As of today, the chain is still offline. No restart date.
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DEPOSIT VALUE -$28,400.00 ▼ CHAIN HALTED - NO ACCESS 1D 1W 1M 3M ALL | ||||||||||||||||||||||||
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| What happened at Initia: An attacker exploited a bug in the MoveVM script cache that let them forge state and mint tokens out of nothing. They created 2 million AUSD, converted some to ETH and USDC, and bridged it all to Ethereum before the team could react. The chain has been offline since. No native INIT tokens were minted, but that distinction matters less when your deposit is locked on a frozen chain. |
Bithumb and Upbit have both flagged INIT as a caution asset. His funds are not gone. They are somewhere between gone and inaccessible, which in practice is the same thing.
He read the docs. He checked the audits. The audits didn't cover the MoveVM cache. That's the thing about audits. They cover what they cover.
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BITE-SIZED COPIUM FOR THE ROAD 🍪
The best part of any loss thread isn't the screenshot. It's the comments section.
Here are today's greatest hits.
| • | "I thought the bottom was in." The bottom is never in. The bottom is a concept invented by people who need to believe their entry was correct. - u/buy_every_dip_2026 |
| • | "This time earnings will be different." He's right. This time the loss was 96.5% instead of 100%. Progress. - u/rddt_moonshot |
| • | "The chain will come back online any day now." It has been seven days. The team's last update said "working to establish the full scope." That is not a timeline. That is a stall. - u/movevm_maxi |
| • | "At least my thesis was correct." Your thesis can be correct and your portfolio can be empty. These are not mutually exclusive. In fact, they are best friends. - u/thesis_intact_funds_gone |
Translation: the copium supply remains at all-time highs. The self-awareness supply has not been restocked since 2021.
See you tomorrow. New losses, fresh copium, same dosage.
