Stormrake - Insights #NEW ATH

When Leverage Fails Spot Prevails

Fri, 17 Oct 2025 09:29:57 +1100

Time and time again, investors attempt to beat the classic buy and hold strategy by either overtrading or, even more risky, incorporating leverage into their trading approach. Leverage can come in a number of forms, whether it’s options contracts, derivatives, copy trading, or algorithmic trading bots. But all carry significant risk when things don’t go to plan, and often, all it takes is one event to reset everything to zero.

One wrong trade, poor risk management, or even events completely out of your control can determine whether you succeed or get wiped out.

Most investors will experiment with leverage at some point in their journey. And for many, these moments become turning points. Even experienced investors aren’t immune to losses with leverage. The old adage still rings true:

90% of investors lose 90% of their capital within 90 days when trading with leverage. That statistic alone shows where the majority stand.

Yes, spot holders are also exposed to volatility, but without the looming threat of a margin call or total liquidation. They may experience drawdowns, but the position remains. It’s not lost, it’s simply fluctuating.

This Weekend: A Lesson in Real Time

Over the weekend, we saw a textbook example of how spot prevailed once again.

A record-breaking $20 billion in leveraged positions was liquidated as Bitcoin dropped over 15% within 30 minutes. Most altcoins dropped further, with some down more than 80%. Anyone with leveraged exposure, including via bots or derivatives, faced margin calls and forced liquidation.

Meanwhile, spot holders experienced the same drawdowns, but crucially, they’re still holding their assets. A Bitcoin holder still holds their Bitcoin. An altcoin holder still owns their tokens. That’s the difference.

Let’s explore three simplified scenarios: Where three investors make allocations on Friday (October 10), their portfolio valuations at the time of the liquidation event at 8:30am (October 11) and then their portfolio value on the following Tuesday (October 13).

Scenario A: $100K Spot Allocation into Bitcoin

Investor A allocates $100K into Bitcoin on Friday, purchasing approx. 0.45 BTC
Saturday 8:30am: Portfolio is worth ~$85K
Today (Tuesday): Portfolio has recovered to ~$95K

Investor still holds 0.45 BTC

Scenario B: $100K Spot Allocation into an Altcoin (SUI)

Investor B allocates $100K into SUI at $3.40 (approx. 30,000 tokens)
Saturday 8:30am: Portfolio worth ~$15K (SUI drops ~85%)
Today: Portfolio has recovered to ~$80K

Investor still holds 30,000 SUI

Scenario C: $100K into a Leverage Strategy or Bot

Investor C allocates $100K into a leveraged strategy or bot on Friday
Saturday 8:30am: Liquidated, portfolio value = $0
Today: Despite recovery in BTC and altcoins, portfolio still = $0

Assets are gone, position cannot recover

There’s a clear outcome here. Investor C was completely wiped out. Investors A and B, while facing drawdowns, are still in the game and positioned to benefit from any further market recovery.

The Stormrake Difference

Stormrake offers spot-only access to digital assets. We do not promote or facilitate margin trading, leveraged instruments, or derivative strategies. As a result, our clients were not impacted by this weekend’s record-setting liquidations.

Those holding spots through Stormrake remain in control of their portfolios and their assets.

If You’ve Been a Victim of Liquidations:

First of all, it’s not the end. Many have experienced the same. You’re not the first, and certainly won’t be the last.

But it’s what happens next that matters.

There are two types of responses to a liquidation:

1. "I’ll act differently next time."

A natural reaction. You may tell yourself you’ll manage risk better, exit positions faster, or tweak your strategy. But fundamentally, the risk remains the same. No one predicted this liquidation event, and there’s no reason to believe something similar or worse won’t happen again. In the current macro environment, where a single headline or tweet can move markets dramatically, risk management becomes even harder to execute reliably. The definition of insanity is doing the same thing and expecting a different result.

2. Learn and adapt.

The better path. Learn from the liquidation and reassess your strategy. Consider switching to spot positions, remove leverage from your portfolio, and take a long-term view. Avoid chasing short-term, promised returns and give your assets the time and space to grow sustainably.

Final Thoughts

The market delivered a clear message this weekend. Leverage can be lucrative, but it's also ruthless. And when volatility strikes, survival is the priority.

Spot holders ride through the storm. Leveraged traders often don’t.

Make sure you’re still in the game when the next wave comes.

Written by Alexandar Artis

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The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

Stormrake is not a financial adviser and does not provide financial product advice. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances. Stormrake is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by this newsletter.

Disclaimer

All statements made in this newsletter are made in good faith and we believe they are accurate and reliable. Stormrake does not give any warranty as to the accuracy, reliability or completeness of information that is contained here, except insofar as any liability under statute cannot be excluded. Stormrake, its directors, employees and their representatives do not accept any liability for any error or omission in this newsletter or for any resulting loss or damage suffered by the recipient or any other person. Unless otherwise specified, copyright of information provided in this newsletter is owned by Stormrake. You may not alter or modify this information in any way, including the removal of this copyright notice.

Copyright © 2024 Stormrake Pty Ltd, All rights reserved

Sonic: The Comeback Layer 1?

Fri, 04 Jul 2025 17:48:29 +1000

The Story

If you’ve been following crypto for a few years, you might remember Fantom (FTM). Back in 2020 during the “DeFi summer,” Fantom stood out as a blockchain designed to run smart contracts quickly and cheaply — a big advantage at the time, since Ethereum was struggling with high fees and slower speeds.

At its peak in 2021, Fantom attracted almost $8 billion in value locked on its network, putting it in the same league as blockchains like Solana, Polygon, Avalanche and Binance Smart Chain. Fantom’s price reached $3.46, giving it a market cap of $8.4 billion and putting it inside the top 30 crypto projects — bigger than Tron, Bitcoin Cash and Stellar back then.

But after that boom came the bust. When the crypto market cooled off in late 2021 and 2022, Bitcoin fell almost 80%, and most altcoins dropped by 95% or more. Fantom was one of them, falling to just $0.16. On top of the market downturn, Fantom lost its most well-known figure, Andre Cronje, who is often called the “Godfather of DeFi.” His early exit shook confidence in the project. Cronje is known for building Yearn.Finance, which went from a market cap of $2 million to $3 billion in under a year, so his departure had a big impact.

Eventually, Cronje came back with a plan to upgrade Fantom and keep it competitive. This led to Sonic, the new version of the chain.

By December 2024, the upgrade was live. Fantom’s price had recovered to $1.45 — up over 800% from its lows. However, since the switch, Sonic has struggled to hold that momentum and today trades around $0.33. The big question now is whether Sonic can find its spark again and return as a leading blockchain for decentralised finance.

What’s Happening Under the Surface

So, what’s really going on with Sonic? On the one hand, there’s a lot of positive activity. Developers from Fantom have moved over, and builders from other chains like Solana and Ethereum are now building on Sonic too. Andre Cronje’s vision was always to make a blockchain that’s fast, affordable and friendly for developers, and that part seems to be working.

When Sonic first launched, things got off to a rough start. Some big crypto exchanges described the upgrade as a “delisting” instead of explaining it as a planned migration. This confused everyday investors and created fear, which led to a big sell-off just as Sonic was starting out.

Despite that, the network grew quickly. Sonic’s total value locked (TVL) jumped from zero to over $700 million within a few months, even beating well-known chains like Sui and Avalanche in certain areas. By May, Sonic’s TVL was over $1 billion, putting it ahead of Polygon at the time. But the price did not follow. While other blockchains held their market value or grew, Sonic’s token stayed under pressure.

A big reason for this was the end of Sonic’s long-term relationship with Wintermute, a major market maker that helps provide trading liquidity. After this five-year partnership ended, Wintermute began selling millions of Sonic tokens. This added huge selling pressure and dragged the price down to around $0.30.

Source: https://intel.arkm.com/explorer/entity/wintermute

Interestingly, Wintermute and other big holders have since started buying Sonic tokens again. This helped the price bounce back slightly. On top of that, Sonic did something Fantom never managed to do: secure a listing on Coinbase, the largest crypto exchange in the US. This is a big deal because it means better access for investors and potentially more trading volume.

Another positive development is Sonic’s new airdrop. The team launched a 200 million token airdrop to reward users for holding and using the network. Unlike many crypto airdrops, Sonic’s is designed to discourage people from immediately selling their free tokens. If you want to claim your tokens early, you lose a big chunk of the reward. The nine-month vesting period encourages users to stick around and stay active. Future airdrop rewards will also depend on how much you actually use Sonic’s apps, not just holding the token passively. You can read more about how the airdrop works here.

One thing many overlook is just how fast Sonic really is. Its blockchain can handle up to 400,000 transactions per second (TPS), which is huge when you compare it to other blockchains and even traditional payment systems.

For context, Sui handles about 297,000 TPS, Solana around 65,000 TPS, Arbitrum about 40,000 TPS, and Avalanche only about 4,500 TPS. Even Visa and Mastercard process far less, with around 24,000 TPS and 5,000 TPS respectively. When you see how fast Sonic is — yet its value and locked funds are still smaller than slower blockchains — it shows there could be more potential if this technology is fully put to use.

Where Sonic Stands

When looking at Sonic’s price chart, it helps to include Fantom’s older price history to get the full picture. Over the past five years, Fantom has seen major ups and downs that help explain where Sonic stands today.

After the Covid market crash, Fantom took off during the 2020 DeFi boom. In 2021, it hit an all-time high of $3.48. Then the crypto winter hit, sending the price down by about 95%. In early 2024, Fantom found its footing again, bouncing alongside Bitcoin before dipping once more near its cycle lows. This pullback lined up with a key long-term trendline that has acted as strong support for years.

That trendline, combined with a bullish signal called an engulfing candle, helped trigger a huge 500% rally over six months. After that, Fantom’s price moved mostly sideways through mid-2024, then rallied again during the US election period, setting up the switch from Fantom to Sonic. That rally marked Sonic’s current cycle high.

Source: https://www.tradingview.com/x/LYpGmfrx/

Since the migration, Sonic’s price action has not been great. Apart from a brief bounce, it’s mostly been drifting lower. Many Sonic charts do not include the earlier Fantom price data, but this old data shows where important support levels still exist. Without it, the chart can look like Sonic has no real floor.

At today’s levels, Sonic’s price is still down about 90% from its 2021 high. For long-term holders, it has been frustrating to watch other coins set new highs while Sonic struggles. Part of this has been Sonic’s own challenges, but broader market factors like global tensions and economic uncertainty have made things harder too.

The good news is that some signals now look more positive. Sonic has once again bounced from that key trendline, which has held for four years. Another potential bullish engulfing candle has appeared, which can suggest a turnaround if it holds. This same pattern led to a big rally in 2023. With Bitcoin staying strong and some macro worries easing, Sonic may have the setup to improve in the second half of the year.

Nothing is guaranteed, of course, but traders watching Sonic see levels like $1 or $1.50 as areas that could be revisited if the crypto market keeps moving higher. A return to its all-time high at $3.48 would need nearly everything to go right, but even getting halfway there would be a major comeback.

What to Watch Next

Sonic’s story has been a rollercoaster. From huge gains to massive losses, and now a slow rebuild. The big reasons it struggled — from poor communication to unexpected big sell-offs — seem to have been addressed. On-chain activity remains strong, developers are building, and the new airdrop system encourages users to stick around and actually use the network.

Combined with its impressive transaction speed, Coinbase listing and key players buying in again, Sonic has a mix of factors that could help it turn the corner. This is not financial advice, but for everyday investors, it’s one to keep on the watchlist if you’re interested in blockchains with strong communities and lots of development.

Patience and good research are key, as always. The next six to twelve months will show whether Sonic can tap into its full potential and reclaim its place among the top projects in decentralised finance.

Written by Alexandar Artis

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The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

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Overtrading leads to Underperformance

Fri, 13 Dec 2024 13:56:43 +1100

The recent price action in the crypto markets has underscored the importance of avoiding overtrading. Bitcoin has once again proven its dominance, climbing to new all-time highs while altcoins have delivered mixed results. Since November 7th, Bitcoin has surged from $66.8k to an all-time high of $104k, marking an impressive 50% rally in just a month. This rally initially drove Bitcoin dominance above 60%, only to retreat slightly, allowing altcoins to shine briefly—perhaps hinting at the start of an alt season. However, despite Bitcoin dominance peaking on November 21st, the price has continued its upward trajectory, setting new highs above $100k.

The strategy remains straightforward: buy Bitcoin. Bitcoin is the benchmark of the crypto market, and if your portfolio underperforms Bitcoin, you’re falling behind. Over the last 14 years, Bitcoin has delivered a staggering compound annual growth rate (CAGR) of 155%, compared to Gold’s 7%. Bitcoin should be the cornerstone of your portfolio, complemented by a strong allocation to select altcoins poised to outperform during their brief periods of dominance.

The Cost of Trying to Outsmart Bitcoin

The real danger arises when investors or traders try to outsmart Bitcoin, attempting to sell at the top and buy back at the bottom. Bitcoin has a knack for punishing impatience, and those who sell early often end up buying back at higher prices. Similarly, waiting for lower prices can result in missed opportunities. For instance, in November 2022, when Bitcoin was at $15k, many hesitated to buy, anticipating a drop to $12k—which never came. These individuals eventually bought back in at much higher prices.

A more recent example occurred during the US election period, with Bitcoin trading just below $70k. Fear of a potential pullback under a Kamala Harris-led administration sidelined many investors. They missed out on the subsequent rally, where Bitcoin soared to over $100k.

The current rally, from $66.8k to $104k, further illustrates this phenomenon. Hesitant buyers have repeatedly waited for a larger pullback, only to watch Bitcoin recover and continue climbing. Even during two rapid corrections—from $99.4k to $90.8k and from $104k to $93.8k—many stayed on the sidelines, expecting deeper retracements. These missed opportunities left investors watching from the sidelines as Bitcoin surged to new heights.

Time in the Market Beats Timing the Market

The key takeaway? Time in the market beats timing the market. Bitcoin rewards patience and punishes overcomplication. Trying to trade Bitcoin often leads to underperformance, while simply buying and holding has historically delivered the best results.

When investors miss out on Bitcoin’s gains, they often turn to altcoins in a bid to catch up. While it’s true that some altcoins outperform Bitcoin, this period of outperformance is usually brief and limited to specific phases of the four-year cycle. For example, while outliers like Solana or Sui may outperform for extended periods, the majority of altcoins underperform Bitcoin most of the time.

During Bitcoin’s recent meteoric rally, only a handful of altcoins have matched or surpassed its performance, with most lagging far behind. Investors who shifted into altcoins hoping to make up for missed Bitcoin gains have, in many cases, fallen even further behind the benchmark.

Overtrading: A Losing Strategy

Emotion-driven traders often make poor decisions, buying into strength and selling into weakness. At first glance, this approach may seem logical, but the data tells a different story. Overtrading disadvantages you from the start—fees accumulate with every trade, and the constant attempt to chase moves results in suboptimal performance.

The portfolio simulation above, comparing an overtrader with a patient investor, highlights the stark difference: starting with $100,000, the overtrader consistently underperforms due to transaction costs and mistimed moves, while the patient investor who simply holds Bitcoin achieves significantly greater gains.

Overtrading is a slow but sure way to diminish your portfolio value. Trading fees, regardless of the platform, add up over time, eating into potential profits. The lesson is clear: holding Bitcoin long-term is a far more effective and sustainable strategy than trying to outmaneuver the market.

Final Thoughts

Bitcoin is the foundation of any crypto portfolio for a reason. It offers unparalleled growth potential and serves as the benchmark against which all other assets are measured. Don’t fall into the trap of overtrading or chasing short-term gains. Patience, discipline, and a long-term mindset will always outperform impulsive decisions.

Let Bitcoin do the heavy lifting. Buy, hold, and reap the rewards over time. Keep calm and HODL

Written by Alexandar Artis and Tej Toor

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Reach out to us at Stormrake for further market insight and allow us to help you navigate the sea of mania and laser-eye memes, so that you can realise your goals in the market!

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The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

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BREAKING NEWS: Bitcoin Hits New All-Time High Amid Trump’s Election Win

Thu, 07 Nov 2024 14:28:53 +1100

Bitcoin reaps the reward of a Trump Victory

Donald Trump has won the U.S. Presidential Election, marking his return to the Oval Office. Markets are rallying, and the “Trump Pump” is in full effect. Bitcoin has set a new all-time high of $75,358.70, currently trading at $73,500—up 9% from this morning's low of $66,800.

This result is the most bullish outcome we could have hoped for. As predicted in our Morning Note, a Trump victory has pushed Bitcoin to break its previous all-time high. In fact, the new high was reached less than four hours after vote counting began, as Trump appeared to lead in key swing states. As the probability of his victory increased, Bitcoin climbed further, eventually surpassing its previous ATH with no resistance. The U.S. markets have yet to open—how will they react to Trump’s near-confirmed presidency and Bitcoin’s new all-time high? Will the bullish momentum continue to drive the price higher?

What Does This Mean for Bitcoin and the Greater Cryptocurrency Industry??

U.S. Debt Levels

While Trump’s presidency is extremely bullish for Bitcoin, there remains the looming concern of U.S. debt levels, which currently stand at $35 trillion. Kamala Harris may have been expected to increase money printing more aggressively, potentially devaluing the USD further. However, Trump is also likely to expand the money supply to stimulate the economy, which may lead to higher inflation and a weaker dollar, indirectly boosting Bitcoin’s value against USD.

Bitcoin Strategic Reserve

Another reason to feel optimistic about Bitcoin is the anticipated creation of the Bitcoin Strategic Reserve (BSR). This initiative was one of Trump’s key promises to appeal to cryptocurrency advocates. Under Lummis’ proposed bill, the Federal Reserve and Treasury Department would purchase one million Bitcoin with existing funds. This move would position the United States as the largest nation-state holder of Bitcoin, controlling 5% of the entire network—similar to the country’s share of the global gold supply.

The acquisition of one million Bitcoin represents a potential demand surge of over $73 billion USD ($112 billion AUD). Such buying volume could easily push Bitcoin’s price well over $100,000.

Gensler, You’re Fired

During his campaign as the "Bitcoin President," Trump reiterated his intention to fire SEC Chair Gary Gensler, who has been viewed as an obstacle by the crypto industry. Gensler’s record includes rejecting multiple cryptocurrency ETF applications. With his departure, a more crypto-friendly chair will pave the way for new ETFs, including the next Spot ETF which is speculated to be a Spot Solana one. The door could open for more altcoin ETF filings, further legitimising the broader cryptocurrency space.

The Rest of 2024

The bullish momentum set by Trump’s win is likely to persist. After reaching a new all-time high, the next target for Bitcoin is $88,000, the breakout target from the current bull flag formation. This could be reached within the next few weeks or months. Once this is achieved, the $100,000 milestone is within sight. Could Bitcoin hit this level before the end of the year? The outlook is promising. Sentiment is highly bullish, the election has favored a pro-Bitcoin president, and Bitcoin has already hit a new all-time high—all indicators suggest Bitcoin may climb much higher.

Written by Alexandar Artis

Create a brokerage account today

Get Started

Reach out to us at Stormrake for further market insight and allow us to help you navigate the sea of mania and laser-eye memes, so that you can realise your goals in the market!

No Advice Warning

The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.