Major Bitcoin holders, often referred to as whales, are increasing their sales of the original cryptocurrency to invest in Ether (ETH).
This trend indicates a “natural rotation” towards Ether and other altcoins expected to yield greater returns, according to Nicolai Sondergaard, a research analyst at crypto intelligence platform Nansen, as reported by Cointelegraph.
The shifting investment capital persists despite rising worries about potential selling pressure, as Ethereum’s validator queue hit a record high with nearly $5 billion worth of ETH tokens waiting to be withdrawn on Thursday, leading to withdrawal times stretching to an unprecedented 18 days and 16 hours.
A significant contributor to this changing investor landscape appears to be a large whale, which converted over $2.59 billion in Bitcoin (BTC) into a $2.2 billion Ether position and a $577 million perpetual long position, realizing $33 million in profits from the perpetuals on Monday, as Cointelegraph detailed.
Crypto whales purchase $456M in Ether amid “natural rotation” from Bitcoin
Large cryptocurrency investors, or whales, are acquiring hundreds of millions of Ether, pointing to an organic shift in investor focus toward altcoins with greater upside potential.
According to blockchain data platform Arkham, nine substantial whale addresses collectively purchased $456 million worth of Ether (ETH) from Bitgo and Galaxy Digital, as stated in a Tuesday X post.
The rising interest among whales for the second-largest cryptocurrency suggests a “natural rotation” into Ether and other altcoins that offer more upside potential, as noted by Nicolai Sondergaard from Nansen.
“This looks like a natural rotation, with investors locking in profits from Bitcoin and reallocating into other tokens for potential gains,” the analyst commented to Cointelegraph, adding:
“Ether, in particular, stands to gain due to its strong current momentum and interest from Ether treasury companies.”
While recent whale activity in Ether is “noteworthy,” the trend indicates that fund flows are expanding beyond Bitcoin as market players seek new opportunities, according to the analyst.
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Ethereum exit queue reaches record of $5B ETH, raising concerns of sell pressure
The Ethereum network is witnessing the largest validator exit in cryptocurrency history, with over 1 million Ether tokens queued for withdrawal from its proof-of-stake (PoS) staking.
On Thursday, the Ethereum exit queue exceeded 1 million Ether (ETH), valuing around $4.96 billion, representing the tokens set for withdrawal by the network’s validators who are crucial in adding new blocks and verifying transactions.
This massive outflow has led to a waiting period for validator exits reaching an all-time high of 18 days and 16 hours, as per blockchain data sourced from validatorqueue.com.
While this does not imply that all validators are looking to liquidate their holdings, a considerable portion of the nearly $5 billion could be sold to secure profits given that Ether has surged 72% over the last three months.
“The queue reaching 1 million ETH signifies healthy market dynamics instead of raising any alarm bells,” said Marcin Kazmierczak, co-founder of RedStone blockchain oracle firm, in a statement to Cointelegraph, adding:
“It’s important to recognize that these exits are minimal compared to the institutional capital flowing into Ethereum.”
The “unprecedented demand” coming from public instruments like treasury firms and exchange-traded funds indicates that these validator sales are “easily absorbed by institutional interest,” he remarked.
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Blockchain tokenization prevents 394M tons of CO₂ in $32B ESG initiative
The wealth tokenization company Arx Veritas and the tokenization infrastructure firm Blubird are leveraging blockchain technology to prevent nearly 400 million tons of CO₂ emissions, setting a record for the digital asset tokenization sector.
Collectively, they have tokenized $32 billion worth of Emission Reduction Assets (ERAs) on Blubird’s Redbelly Network, seeking to establish a “new benchmark” in the financing and monitoring of sustainability initiatives.
The tokenized assets comprise capped oil wells and coal mines, representing over 394 million tons of CO₂ emissions avoided, the largest tokenization effort aligned with the Environmental, Social, and Governance (ESG) standards.
The emissions prevented are equivalent to about 395 million round-trip flights from New York to London, or 986 billion miles driven by a typical passenger vehicle, or 105 times the annual CO₂ emissions of Iceland.
Blubird has reported “strong institutional demand for ESG-compliant asset tokenization, with transactions exceeding half a billion dollars under discussion and a significant institutional purchase nearing completion,” according to a Thursday announcement shared with Cointelegraph.
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Kanye West’s YZY token: 51,000 traders lost $74M, while 11 netted $1M
Over 51,000 traders faced losses on Kanye West’s recently launched memecoin, underscoring the risks associated with trading celebrity-associated tokens lacking intrinsic technological value.
The YZY token, linked to Kanye West, debuted on the Solana blockchain on August 21 and surged 1,400% in its first hour before plummeting by over 80%.
Out of the 70,200 traders who invested in the token tied to the celebrity, more than 51,800 suffered losses, with three traders reporting losses exceeding $1 million, according to data from blockchain platform Bubblemaps.
“Conversely, 11 wallets realized gains of over $1M,” stated Bubblemaps in a Wednesday X post.
Amidst the extensive losses among most investors in the token, only 11 out of 70,000 wallets demonstrated profits exceeding $1 million, with 99 reporting gains over $100,000.
Currently, the YZY token’s value has decreased by over 80% from its peak, trading at $0.5515, with only 19,531 traders still holding it, according to data from blockchain intelligence platform Nansen.
Former kickboxing champion Andrew Tate was among those attempting to profit from the rapper’s token. Tate established a 3x leveraged short position on the YZY token, leading to a cumulative loss of $700,000 on the Tate-related Hyperliquid account, as Cointelegraph reported on Friday.
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Hyperliquid surges as Arthur Hayes forecasts 126x growth in Tokyo
The native token of the decentralized derivatives exchange Hyperliquid was among the few to show gains over the past 24 hours, as crypto entrepreneur Arthur Hayes predicted a 126x increase over the next three years at the WebX 2025 conference in Tokyo.
Hyperliquid (HYPE) saw an increase of nearly 4% in the last 24 hours, trading at $45.64 at the time of writing, although it briefly surpassed $47 earlier in the day.
Hayes, co-founder of BitMEX, made this forecast during a presentation at the conference, where he mentioned that the expansion of stablecoins could drive annualized fees for the DEX to $258 billion, a significant rise from its current annualized revenue of $1.2 billion.
Hyperliquid serves as a decentralized exchange for perpetual futures, which are derivative contracts that remain valid indefinitely, allowing speculators to take leveraged positions on crypto assets without the need for ownership.
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DeFi market overview
Data from Cointelegraph Markets Pro and TradingView shows most of the top 100 cryptocurrencies ended the week lower.
The OKB (OKB) token suffered the most significant loss in the top 100, plummeting over 25%, followed by the Aerodrome Finance (AERO) token, which fell over 15% on a weekly basis.
Thank you for reviewing our summary of the most significant DeFi developments this week. Join us next Friday for more stories, insights, and education concerning this rapidly evolving space.
