Preview: "Crypto markets are seeing a “natural rotation” into Ether and altcoins with more potential upside, Nansen’s research analyst told Cointelegraph."
Bitcoin whales, or large tokenholders, are selling more of the world’s first cryptocurrency to gain exposure to Ether’s price.
The move signals the market’s “natural rotation” into Ether
and other altcoins with more upside potential, Nicolai Sondergaard, research analyst at crypto intelligence platform Nansen, told Cointelegraph.
The growing investor capital rotation occurred despite increasing concerns over incoming selling pressure, due to the Ethereum validator queue reaching an all-time high of nearly $5 billion worth of ETH tokens on Thursday, pushing withdrawal times to a record 18 days, 16 hours.
Part of the shifting investor mindshare may be attributed to a massive $11 billion whale, which rotated over $2.59 billion worth of Bitcoin
into a $2.2 billion spot Ether and a $577 million perpetual long position, locking in $33 million worth of profit from the perps long on Monday, Cointelegraph reported.
Crypto whales buy $456M Ether in “natural rotation” from Bitcoin
Cryptocurrency whales, or big investors, are buying hundreds of millions of Ether, as analysts point to an organic rotation of investor mindshare toward altcoins with more upside potential.
Nine “massive” whale addresses bought a cumulative $456 million worth of Ether
from Bitgo and Galaxy Digital, blockchain data platform Arkham said in a Tuesday X post.
The growing whale demand for the world’s second-largest cryptocurrency signals the market’s “natural rotation” into Ether and other altcoins with more upside potential, according to Nicolai Sondergaard, research analyst at crypto intelligence platform Nansen.
“A lot of this looks like natural rotation, investors locking in profits from Bitcoin’s run and moving into other tokens to catch potential upside,” the analyst told Cointelegraph, adding:
“Ether in particular is benefiting because it has strong current mindshare and momentum from Ether treasury companies.”
While recent Ether whale movements are “notable,” the “broader trend is simply that flows are spreading out beyond Bitcoin as market participants look for the next move,” the analyst said.
Ethereum exit queue hits record $5B ETH, raising sell pressure concerns
Ethereum is seeing the largest validator exodus in crypto history, with over 1 million Ether tokens currently waiting to be withdrawn from staking through Ethereum’s proof-of-stake (PoS) network.
Ethereum’s exit queue surpassed 1 million Ether
worth $4.96 billion on Thursday. This marks the amount of Ether set for withdrawal by the network’s validators, who are responsible for adding new blocks and verifying transactions in proposed blocks, playing a vital role in the functioning of the blockchain network.
The mass exodus has extended the validator exit waiting time to a record 18 days and 16 hours, according to blockchain data from validatorqueue.com.
While this does not mean that all the validators are looking to sell their holdings, a significant portion of the almost $5 billion may be sold to lock in profits, considering that Ether has risen 72% over the past three months.
“The exit queue hitting 1 million ETH reflects healthy market dynamics rather than a cause for concern,” Marcin Kazmierczak, co-founder of RedStone blockchain oracle firm, told Cointelegraph, adding:
“What’s crucial to understand is that these exits pale in comparison to the institutional capital flowing into Ethereum.”
The “unprecedented demand” from public vehicles such as treasury firms and exchange-traded funds means that the validator sales are “easily absorbed by this institutional appetite,” he said.
Blockchain tokenization prevents 394M tons of CO₂ in $32B ESG effort
Wealth tokenization platform Arx Veritas and tokenization infrastructure firm Blubird are using blockchain technology to prevent almost 400 million tons of CO₂ emissions, marking a record for the digital asset tokenization industry.
The two firms have tokenized $32 billion worth of Emission Reduction Assets (ERAs) on Blubird’s Redbelly Network, aiming to set a “new standard” for the financing and tracking of sustainability efforts.
The tokenized assets include capped oil wells and coal mines, representing over 394 million tons of prevented CO₂ emissions, marking the largest tokenization effort aligned with the Environmental, Social and Governance (ESG) framework.
The 394 million tons of prevented CO₂ emissions are attributed to two sources: the extraction, processing, shipping and burning of coal that would have been used, along with the pollutants prevented by capping abandoned oil wells.
The prevented emissions are the equivalent of almost 395 million round-trip flights from New York to London, or 986 billion miles driven by an average passenger car, or 105 times the yearly CO₂ emissions of Iceland.
Bluebird is seeing “strong institutional demand for the tokenization of ESG-aligned assets, with more than half a billion dollars’ worth of transactions under negotiation and a major institutional purchase nearing completion,” the firm wrote in a Thursday announcement shared with Cointelegraph.
Kanye West’s YZY token: 51,000 traders lost $74M, while 11 netted $1M
More than 51,000 traders incurred losses on Kanye West’s recently launched memecoin, highlighting the potential risks of trading celebrity-endorsed tokens with no intrinsic technological utility.
The Kanye West-linked YZY token was launched on the Solana blockchain on Aug. 21. It rallied 1,400% within the first hour before losing over 80% of its value.
Of the 70,200 traders who invested in the celebrity-endorsed token, more than 51,800 realized losses, with three traders losing over $1 million, according to blockchain data platform Bubblemaps.
“Meanwhile, 11 wallets made $1M+,” wrote Bubblemaps in a Wednesday X post.
Amid large-scale losses from the majority of the token’s traders, only 11 out of 70,000 wallets generated over $1 million in profit, while 99 generated over $100,000.
Meanwhile, the YZY token’s price is down over 80% from its all-time high, trading at $0.5515 with just 19,531 traders holding the token, data from blockchain intelligence platform Nansen shows.
Former kickboxing champion Andrew Tate was among the traders looking to profit from the rapper-endorsed token. Tate opened a 3x leveraged short position on the YZY token, leading to a total $700,000 loss on the Tate-related Hyperliquid account, Cointelegraph reported on Friday.
Hyperliquid spikes as Arthur Hayes predicts 126x upside in Tokyo
The native token powering the decentralized derivatives exchange Hyperliquid was one of the few to post a gain over the last 24 hours, as crypto entrepreneur Arthur Hayes told an audience in Tokyo on Monday, he expects it to increase 126x over the next three years.
Hyperliquid (HYPE) had gained almost 4% over the last 24 hours and was trading at $45.64 at the time of writing, though it briefly reached above $47 earlier in the day.
BitMEX co-founder Arthur Hayes made the forecast at the WebX 2025 conference in Tokyo. Hayes said that stablecoin expansion would push the DEX’s annualized fees to $258 billion, from its current annualized revenue of $1.2 billion.
Hyperliquid is a decentralized exchange for perpetual futures, derivative contracts without an expiry date, allowing speculators to take leveraged positions on crypto assets without owning them.
DeFi market overview
According to data from Cointelegraph Markets Pro and TradingView, most of the 100 largest cryptocurrencies by market capitalization ended the week in the red.
The OKB
token fell over 25% as the week’s biggest loser in the top 100, followed by the Aerodrome Finance
token, down over 15% on the weekly chart.
Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education regarding this dynamically advancing space.
0 Comments