Key Insights
- A long-dormant Bitcoin whale recently sold over $2.7 Billion worth of BTC for Ethereum.
- The whale bought nearly 473,000 ETH and opened a massively leveraged long position.
- Ethereum hit a new all-time high above $4,950, which was fueled by institutional demand.
A legendary Bitcoin whale has returned to action and is likely the cause of the ongoing market bloodbath.
This whale, after years of inactivity, has sold more than 24,000 BTC worth $2.7 billion and then rotated the funds into Ethereum.
This massive sell-off triggered a 3% market dip and wiped more than $80 billion from the total crypto market cap. Traders were caught off guard, as on-chain data shows the whale’s address dates back to a 2019 withdrawal from the TX exchange.
Bitcoin Whale Turns to Ethereum
The whale did not just sell BTC; they went all-in on Ethereum. According to updates from Lookonchain, the entity deposited 22,769 BTC to Hyperliquid.
From there, they bought 472,920 ETH worth $2.22 billion and opened a long position worth another $577 million. Reports also indicate that they staked a massive portion of the ETH.
Ethereum recently touched $5,000 before being rejected. At the time of writing, the cryptocurrency is trading around $4,630 and is still showing strength compared to Bitcoin.
Federal Reserve Uncertainty Adds Pressure
The market’s jitters were not caused by the whale alone. Another source of the market’s behaviour was Federal Reserve chair Jerome Powell’s dovish speech at Jackson Hole last week.
His comments briefly boosted crypto prices, and Ethereum rose by nearly 10% in hours.
However, traders are now wondering whether a September rate cut is guaranteed. While the CME FedWatch tool still shows 87% odds of a cut, investors are still pessimistic, according to odds on PolyMarket, where the chances are closer to 81%, up from 57% before Powell’s remarks.
Analysts from Presto Research noted that the market’s reaction to the speech was a “knee-jerk rally,” because by Monday, leveraged traders were already facing the consequences with over $715 million liquidated across major exchanges.
Corporate Interest in Ethereum
Ethereum’s rise hasn’t been driven by retail speculation alone. Companies around the world have been showing interest in the asset as both a store of value and as a platform.
For example, Sharplink Gaming has accumulated 740,760 ETH, worth about $3.2 billion. Meanwhile, BitMine has become the largest institutional holder with 1.5 million ETH, worth $6.6 billion.
Institutional demand has also spilt into exchange-traded products like the ETFs. ETH-focused investment products saw $625 million in inflows in late August, while Bitcoin ETFs logged six straight days of outflows.
Ethereum Outshines Bitcoin
Ethereum’s strength has surprised many in the industry. It has outperformed Bitcoin for weeks, especially after breaking its all-time high. On the other hand, Bitcoin continues to drift further from its $124,400 high
The latter now trades underneath $112,000, under pressure from outflows and selling from whales.
Overall, the whale’s move and institutional moves have been some of the biggest sources of optimism for the market. Now that ETH is sitting near all-time highs and corporate treasuries are filling up with the token, the tide is on its side.
Bitcoin is still very popular among mainstream investors. However, several headwinds seem to be against it in the short term.
Ethereum, on the other hand, is at the centre of both speculative and institutional capital interest. In all, investors should be on the lookout for the next few weeks and what happens then.
If Ethereum holds its ground and breaks above the $5,000 mark, it could be a signal that the tables have truly turned in its favour. However, considering the macro uncertainty and erratic whale behaviour lately, traders should be on high alert.
Ivan Petrov is a seasoned journalist with deep insights into Russia’s dynamic crypto landscape. His work focuses on market dynamics and the transformative potential of blockchain technology, making him a go-to expert for understanding Russia’s digital financial innovations.
