Abraxas Capital Bleeds $190M in Hedging Fiasco—When ’Risk Management’ Goes Rogue

Another hedge fund learns the hard way that crypto markets chew up and spit out traditional playbooks.

Abraxas Capital just joined the Wall Street Hall of Shame with a $190 million unrealized loss on what was supposed to be a 'hedge.' Spoiler: Their risk models didn't account for crypto's signature volatility.

The Irony Is Palpable

Hedging strategies exist to mitigate losses—not amplify them. Yet here we are, watching another institutional player get steamrolled by the very asset class they tried to tame. The $190 million hole? That's not a rounding error—it's a full-blown indictment of legacy finance's crypto calculus.

Crypto Doesn't Care About Your Spreadsheets

Abraxas isn't the first to underestimate digital assets, and won't be the last. Pro tip: When your 'hedge' loses more than most hedge funds manage, maybe reconsider the strategy. Or better yet—embrace the chaos. After all, in crypto, even the 'safe' bets can liquidate your ego faster than a leveraged long on a Tuesday.

Wall Street's latest lesson? You can't hedge against innovation. But hey—at least they're finally getting skin in the game.

Abraxas Capital Management Ltd, a popular London-based investment management platform, has recently experienced notable losses. As per the data from Lookonchain, a couple of accounts recently started shorting leading to a notable $190M in unrealized losses for Abraxas Capital Management Ltd. As the on-chain analytics revealed, the accounts are shorting as wider hedging against spot crypto holdings. The crypto assets included in the shorting strategy include Bitcoin ($BTC), ethereum ($ETH), Sui ($SUI), Hype ($HYPE), and Solana ($SOL).

Brutal losses!

Abraxas Capital's 2 accounts are shorting $ETH, $BTC, $SOL, $HYPE, and $SUI as a hedge against spot holdings, with total unrealized losses exceeding $190M!

They're holding 113,819 $ETH($483M) in shorts — down more than $144M.https://t.co/LOezEAcQtx… pic.twitter.com/yXHKzNjEaB

Ethereum Shorts Account for $144M out of $190M in Abraxas Capital’s Unrealized Losses

With this shorting plan carried out by 2 accounts, Abraxas Capital has reportedly witnessed nearly $190M in losses. The biggest losses reportedly stemmed from the Ethereum ($ETH) shorts. In this respect, the $ETH shorting led to a loss of over $144M in terms of unrealized declines. As a result of this, the current Ethereum ($ETH) holdings of Abraxas Capital stand at 113,819 $ETH, denoting $483M.

The data also discloses that the short exposure of Abraxas Capital is also significant in relation to the overall market liquidity. Though the losses seem steep, the market onlookers consider the short positions to be operating as a hedge instead of speculative bets. Often, the big asset managers utilize this approach to offset their downside risks amid the market volatility.

Highlighting Crypto Derivatives’ Double-Edge Nature

According to Lookonchain, Abraxas Capital’s losses of $190M from shorting denote the high-risk/reward nature of the broader derivative strategies dealing with crypto markets. Hence, amid the fluctuating prices of $BTC, $ETH, and others, the ultimate outcome of the platform will be based heavily on overall market trends as well as likely reversals. Currently, the portfolio of the platform displays a textbook case presenting the likelihood of massive losses as well as revenue flows driven by hedging strategies.