Copy-tradingKilled

"Follow the smart-money wallets" on Hyperliquid

+74.8 → −26.0 bps

the edge, before and after removing one lucky wallet

bps = basis points = a hundredth of a percent (100 bps = 1%).

In plain English

“Just copy the winning wallets” is one of the most-pitched strategies in crypto. We mirrored 205 real trades, then re-ran the test removing one wallet at a time. The entire edge came from a single lucky wallet: drop it and a winning record turns into a loss. A widely-believed edge, falsified on real data.

What was claimed

Mirror the profitable wallets and their edge becomes your edge.

The bar we locked

edge survives dropping any single wallet, > 14 bps

What the data said

+74.8 → −26.0 bps dropping a single wallet

Why it's dead

The "follow profitable wallets" cohort looked great, until a leave-one-out (re-running the numbers with one wallet removed at a time, to see if any single wallet is doing all the work) showed a single wallet carried the entire result. Remove it and the edge inverts.

The detail

n=205 mirrored events. One wallet was 51.5% of events; dropping it took the cohort to −26.0 bps. The apparent edge was concentration, not a repeatable signal. The drawdown gate (a pre-set maximum-loss circuit breaker) also fired at the implemented size.

Kill date: 2026-06-21
Sample: n=205
Method: Pre-registered live test
Verdict: concentration ≠ edge

What it would have done to your money

You put in$10,000

You run it for50 mirrored trades

You would have

$8,779

−$1,221

lost (12%)

You started with$10,000

This strategy left you$8,779

Instead of not copying at all$10,000

Locked to this strategy's real measured result of -0.26% per mirrored trade, compounded. You choose the amount and the time. We don't choose the return, the strategy already did.