James Wynn, a well-known high-risk crypto trader who turned 7,600 USD into 25 million USD on PEPE, warns traders that the markets will get worse before they recover. Wynn explains a cautious multi-asset strategy: he shorts American stocks, buys oil, and purchases Bitcoin (BTC) during price dips with spot capital.
All of this is happening while U.S. President Donald Trump sends a strong message against Iran and the Strait of Hormuz on Sunday.
James Wynn's macro bets and the Iran factor
The trader's strategy reflects a larger thought on increased geopolitical tension. James Wynn says he is shorting the S&P 500 and Nasdaq, going long on WTI crude oil, and buying more BTC when the price drops.
He also believes that the Singapore dollar, Chinese yuan, euro, and British pound have positive expected value. He thinks that gold will maintain its price or soon reach new highs.
Regarding real estate, Wynn shares his own exposure to the sector and calls it a lost position, but emphasizes the importance of diversifying investments.
His strategy aligns with the current geopolitical situation. President Donald Trump issued Iran a 48-hour ultimatum on Truth Social and threatened to strike power plants and bridges if Tehran does not reopen the Strait of Hormuz by Tuesday.
Iran has effectively kept the strait closed since the US-Israel military operation began on February 28, disrupting about 20% of the world's oil supply.
Wicks at low liquidity and liquidation hunting
James Wynn also warns about the development of Bitcoin prices. He points to a manipulation spike on BTC during low trading volume on Sunday, which he says indicates what to expect next.
"Another typical manipulation spike on low volume on Bitcoin on a Sunday shows even more of what is coming," he says.
In fact, the BTC price rose by 1,000 USD in just ten minutes on Sunday, leading to short positions worth 28 million USD being liquidated in an hour, amid continued pursuit of leverage in a low liquidity market.
BTC is now trading near 67,201 USD, and the Fear and Greed Index remains at 12, indicating extreme fear. The token has fluctuated between 65,000 and 73,000 USD for several weeks despite ongoing negative sentiment.
As Trump's own deadline approaches on Tuesday and the oil price remains above 100 USD per barrel, the economic situation for risky assets remains uncertain.