Jez Says His $4 Million PEPE Bet Would Have Failed With 8x Leverage

A Full-Position PEPE Bet After a Liquidation

Jez, a former Morgan Stanley quant who later traded at Millennium, says the trade that rebuilt his account was a single, unleveraged position in PEPE, and that its size, not borrowed exposure, is what carried it. Speaking on the How to Make it in Crypto podcast, he placed the trade in its setting: in 2023, immediately after a leveraged ETH short had been liquidated, he was in London with the trader known as Blur, working through what the market had missed. When PEPE launched at a market capitalization of $30 million to $40 million, he committed everything he had left to it. Friends called him an “idiot” at the time, he recalled. The position was eventually worth $4 million, and the move helped set off the broader memecoin wave that carried the PEPE price far beyond his entry. Three details in the account matter for how he frames it. The entry came from a position of near-total loss, not from strength. It carried no leverage, so there was no liquidation line waiting underneath it. And it was committed in one decision rather than scaled into, which he presents as the point: a full-position bet either survives on its own thesis or it does not, and no margin call gets to decide the matter first. He does not read the episode as an endorsement of the token itself. His framing is about position construction, one asset, one thesis, the whole balance, zero borrowed exposure, taken at a moment when the token was small enough that a revaluation could multiply the stake several times over.

The 8x Leverage Arithmetic

His argument against leverage is arithmetic rather than moral. Citing research he says he finds persuasive, he claims that a trade with the direction right, where the asset rises within the hour, turns negative in expectation once 8x leverage is applied, because random intrabar variance can hit the liquidation line before the move completes. The problem, in his words, is variance, not direction. He adds a behavioral layer: positions only ever seem to grow, and he says he has never closed one smaller than he opened it, with the hard line at zero doing the rest. A crypto capital base that resets on every 5% drawdown, he argues, never gets to compound. The alternative he lays out is concentrated, high-conviction spot exposure sized roughly along Kelly criterion lines, the bigger the edge, the bigger the position. Diversification, he says, is for protecting an account, not for making money, and he points to a friend's spread-out portfolio that drew most of its returns from one or two coins. A 20% drawdown becomes tolerable, in his view, once the holder understands the market is wrong and the thesis needs 6 to 9 months to play out. On funding the bets, his advice is to keep the salary, which he calls an excellent risk-free-rate farm, and to save ammunition for the one trade worth taking, a discipline he borrows from poker's VPIP statistic. Past the $1 million to $2 million range, he says he would slow down and diversify somewhat. He still expects the perps market to grow another 10x, and he thinks retail should stay out of crypto futures; the durable position is owning the venue itself. His own record, he notes, skews toward bets on exchange infrastructure, with Uniswap, GMX and HYPE among the winners, and that is where he has placed himself as a co-builder of PaperTrade, where he now trades rarely and holds long views.

Where the Edge Sits in a 10x Perps Market

If his 10x perps call is right, the returns he describes would accrue to whoever owns the venue rather than to the trader at the leverage slider, which is the position he has moved himself into. If the call is wrong, the 2023 PEPE episode still stands on its own record: an unleveraged, concentrated entry at a $30 million to $40 million market cap produced a $4 million position, while the leveraged ETH short before it produced a liquidation. For anyone sizing a memecoin position today, that contrast, together with execution costs such as slippage, describes what actually sits in a trader's control regardless of where the token trades next.