The value of Ethereum ($ETH), the second-largest cryptocurrency by market capitalization, recently crossed the $2,000 threshold following the announcement of a spot Ethereum exchange-traded fund (ETF) by the world’s largest asset manager. Despite this surge, an Ethereum whale is anticipated to incur a $118 million loss on its investment.
BlackRock’s registration of the iShares Ethereum Trust in Delaware signals its intention to introduce a spot Ethereum ETF in the United States, mirroring its previous approach before filing for a spot Bitcoin ETF with the U.S. Securities and Exchange Commission (SEC). This development led to a spike in ETH prices, reaching around $2,100 per token.
According to on-chain monitoring service Lookonchain, a whale deposited 10,000 tokens onto Binance at a loss after the ETH price rise. The whale withdrew 123,000 ETH from exchanges at an average price of $3,672, subsequently depositing 83,000 ETH, valued over $186 million, on exchanges at $2,246. This strategic move places the whale at a potential loss of $118 million if they were to sell at current market prices post-deposit.
Despite the loss, the whale still holds $74 million worth of Ethereum in its wallet and might be awaiting a spot Ethereum ETF listing before making further decisions. While Ethereum futures ETFs have been available in the U.S. since October of the previous year, their trading volume has been relatively subdued.
A spot Bitcoin or Ethereum ETF directly holds the respective cryptocurrency as its underlying asset, offering investors exposure to market price movements without the need to manage the assets themselves. Additionally, spot ETFs often feature lower fees compared to futures ETFs, which involve futures contracts and associated costs like rolling over contracts or hedging against price fluctuations.