Ethereum Whale Could Lose $118 Million Even as ETH Price Breaks $2,000 Mark

The price of the second-largest cryptocurrency by market capitalization Ethereum ($ETH) has recently surpassed the $2,000 mark after the world’s largest asset manager moved to launch a spot ETH exchange-traded fund (ETF). Despite the rise, an ETH whale is expected to lose $118 million on its investment.

As reported, BlackRock recently registered the iShares Ethereum Trust in Delaware, which implies the firm is looking to issue a spot Ethereum ETF in the United States. A similar registration was made before the firm filed for a spot Bitcoin ETF application with the U.S. Securities and Exchange Commission (SEC).

The filing helped the price of ETH surpass the $2,000 mark to trade close to $2,100 per token now. According to on-chain monitoring service Lookonchain, after the price of ETH rose a whale deposited 10,000 tokens onto leading cryptocurrency exchange Binance at a loss.

The whale, according to the service, withdrew 123,000 ETH from cryptocurrency exchanges at an average price of $3,672, and then proceeded to deposit 83,000 ETH worth over $186 million on exchanges at $2,246, meaning they stand to lose $116 million if they sold at market prices after depositing.

The whale notably still has $74 million worth of the second-largest cryptocurrency by market capitalization on its wallet, and could potentially be waiting for a spot Ethereum ETF listing before making its next move.

thereum futures ETFs have been traded in the US since last October, but their trading volume has seen somewhat lackluster.

A spot Bitcoin or Ethereum ETF, however, is a type of exchange-traded fund that directly holds Bitcoin or Ethereum as its underlying asset, meaning that the value of the ETF is closely linked to the current market price of Bitcoin or Ethereum, and investors can benefit from the price appreciation of the cryptocurrency without having to buy, store, or manage it themselves.

A spot ETF also often has lower fees and expenses than a futures ETF, since it does not need to pay for the costs of rolling over futures contracts or hedging against price fluctuations. A futures Bitcoin or Ethereum ETF invests in Bitcoin or Ethereum futures contracts, which are agreements to buy or sell the cryptocurrency at a predetermined price on a set future date.

Featured image via Unsplash.