Whale Purchases $10 Million stETH In The past Day, Here Are Possible Reasons Why
August 10 2023 - 9:00AM
NEWSBTC
The crypto verse has recently witnessed a massive splash as an
unidentified entity dove deep into the Ethereum ecosystem. A recent
report from Lookonchain reveals that in a span of 24 hours, the
whale has purchased $10 million worth of Lido Staked Ethereum
(stETH). The Big Purchase And Past Activities Lookonchain, an
on-chain analytics firm, broke the news earlier today on their X
(formerly known as Twitter) account revealing that a whale address
was responsible for the withdrawal of 10 million Dai (DAI) from
Maker. The smart whale withdrew 10M $DAI from @MakerDAO and bought
5,403 $stETH again at an average price of $1,851 6 hrs
ago.https://t.co/rIWyjsfRpf pic.twitter.com/aGwmc46gmc —
Lookonchain (@lookonchain) August 10, 2023 According to the firm,
this withdrawal wasn’t without purpose as the whale used the funds
strategically invested to purchase 5,403 Lido Staked Ethereum, each
at an average price of $1,851. Related Reading: Lido’s ETH Deposits
Reach Record High Amid Stagnant stETH Withdrawals For those tracing
the activities of this whale, this isn’t a maiden voyage into the
stETH seas. As reported by Lookonchain, this exact address recorded
two hefty transactions on 24 July 2023. The first transaction saw
the whale dispensing 5.17 million USD Coin (USDC) to acquire 2,802
stETH at a rate of $1,844 each. Not stopping there, the whale
converted a subsequent 10 million USDC into 5,421 ETH, which was
then fully transitioned to stETH. Possible Reasons For Buying stETH
While the motives of crypto whales, just like their real-world
counterparts, often remain beneath the surface and obscured from
the prying eyes of small investors, given the nature of this
particular whale’s stETH acquisitions, it’s plausible to
hypothesize some reasons behind its latest move. Strategic staking
could be a reason behind the whale’s $10 million stETH purchase.
Ethereum’s transition to a proof-of-stake mechanism through ETH 2.0
has opened doors for staking returns. Acquiring stETH, a
representation of staked ETH, could be a strategic move by the
whale to earn rewards while maintaining liquidity. Another
plausible hypothesis could be speculation for price appreciation.
It is worth noting that the whale might anticipate a significant
price appreciation in the near future and investing a sizable
amount can yield substantial returns if the price moves in the
favored direction. Related Reading: Ethereum: Is Lido (LDO) Doomed
To Repeat Three Arrows Capital’s Fate? Diversification of their
portfolio can also be a possible reason behind the whale’s
substantial stETH purchase, especially given the significant
amounts of USDC previously deployed by the whale, so moving some of
these holdings into stETH may be a calculated strategy to achieve
diversification. However, despite the large buys, stETH hasn’t seen
any significant movement. Particularly, the asset has only declined
by 0.5% with a current trading price of $1,850. Featured image from
Unsplash, Chart from TradingView
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