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1inch Investment Fund Just Sold Ethereum, What Do They Know?

1inch Investment Fund, a fund closely tied with the crypto exchange aggregating platform, 1inch, has sold 4,685 stETH for 8.54 million USDC at $1,823, according to Scopescan, an analytics platform, on October 24. By selling at spot rates, the fund has netted $1.28 million in profits since the stETH was bought at an average price of $1,550 less than a week ago.

1inch Investment Fund sells Ethereum| Source: Scopescan on X

1inch Investment Fund Sells stETH

StETH, or staked Ethereum (ETH), is an ERC-20 token representing staked ETH on the Lido Finance protocol. The platform allows anyone to stake their coins and earn rewards without necessarily locking their coins for an extended period. 

As of October 24, Lido Finance is the most popular decentralized finance (DeFi) application looking at total value locked (TVL). DeFiLlama data shows that the protocol manages over $15.7 billion of assets, of which over 95% are ETH. 

Lido Finance TVL| Source: DeFiLlama

Technically, any ETH holder wishing to stake and earn network rewards stake on Lido Finance receives stETH in return, representing the stake amount. The higher the staked amount, the more stETH the protocol issued. This stETH can be traded, transferred, or used to secure loans while concurrently earning network rewards. 

Selling stETH means 1inch Investment Fund automatically unstaked the same amount on Lido Finance and sold the underlying coins. Even so, transferring the underlying ETH can take several days when there might be changes to spot prices.

Curiously, the decision is when the crypto market seems to recover, and Ethereum is roaring back to life towards the $2,000 level. Considering that the fund is private and doesn’t divulge its strategy to the public, it couldn’t be immediately determined why it sells stETH when market confidence is high. 

Will Ethereum Prices Break $2,000?

Looking at price charts, Ethereum prices are up roughly 17% from H2 2023 lows, rallying at spot rates. The October 23 and 24 expansion has seen the coin break higher, registering new October highs. Even so, despite the overall confidence, the failure of bulls to complete reverse losses of August 17 should be a concern.

Ethereum price on October 24| Source: ETHUSDT on Binance, TradingView

Ideally, a comprehensive surge above $1,800 and $2,000 could anchor a leg up toward $2,100 in the coming sessions. When the fund sold stETH at $1,823, price data showed it exited at around today’s peak. There is an inverted hammer in the ETHUSDT daily chart, an indicator that prices are inching lower on increasing selling pressure.

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Whale Purchases $10 Million stETH In The past Day, Here Are Possible Reasons Why

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.

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.

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.

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.

stETH price chart on TradingView

Featured image from Unsplash, Chart from TradingView

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Lido’s ETH Deposits Reach Record High Amid Stagnant stETH Withdrawals

Lido (LDO), the leading liquid staking derivatives (LSD) protocol, recently made waves in the crypto community by enabling staked ETH (stETH) withdrawals. Expectations were high as many anticipated a surge in stakers unstaking their ETH.

However, contrary to these predictions, Lido has witnessed a remarkable increase in ETH deposits, reaching a record-breaking level. This surge has also been reflected in the protocol’s native token which has recorded a rally of more than 20% in the past week.

ETH Deposits Soar to New All-Time High

Despite the introduction of stETH withdrawals, Lido experienced a surge in ETH deposits, defying expectations of widespread unstaking. On Friday, the platform witnessed a significant milestone as the total number of ETH deposited hit an all-time high.

ETH Staked on LSDs over time

According to data provided by Lido, an astounding 6,373,289 ETH is currently staked with Lido, equivalent to more than $11.5 billion. Interestingly, while ETH deposits on Lido continue to soar, stETH withdrawals have remained stagnant around the 450,000 ETH mark, as reported by data from Nansen.

It is worth noting that these withdrawal requests have yet to be processed, contributing to the overall stability of stETH withdrawals. This trend raises questions about the anticipated unstaking frenzy, prompting a closer examination of the factors influencing stakers’ decisions.

As the most significant liquid staking derivatives protocol, Lido holds an impressive 75% market share, surpassing its competitors in the Liquid staking (LSD) space. Notably, according to data from Nansen, Coinbase and Rocket Pool trail behind, occupying the second and third positions.

Furthermore, while it may sound like positive news that ETH deposit is surging while withdrawal flattens, it is worth noting there are several reasons behind this so as not to get carried away. On the one side, the stabilized withdrawal can be attributed to the pending processing of withdrawal requests.

On the other side, it can be attributed to stakers’ long-term commitment to the protocol and the attractiveness of Lido’s offerings amidst the volatile crypto landscape.

Lido Surges 20% In The Past Week

Along with its surge in market share, Lido native token LDO’s price has experienced an upward trend in the past week up by more than 20%. Lido has surged from a low of $1.81 seen last Friday to trading as high as $2.48 on Wednesday.

LDO market capitalization has also recorded huge gains in the past 7 days. LDO’s market cap has surged 20.7% from a cap low of $1.5 billion to a high of over $2 billion on Wednesday. Meanwhile, LDO’s daily trading volume has only continued to range between $60 million and $100 million throughout the week.

Lido DAO (LDO)’s price chart on TradingView

Interestingly, the asset has plunged over the past 24 hours down by 4.4%. LDO currently trades slightly above $2 with a price of $2.18 at the time of writing with a 24-hour trading volume of $62.1 million.

Featured image from Analytic Vidhya, Chart from TradingView