Crypto trader loses 13M turning 30M into 17M in two months
A cryptocurrency trader and the previous largest Ethena (ENA) staker has surrendered with $13 million in mostly realized losses. Succumbing to fear, the investor withdrew a $17 million position that had been built with an initial investment of approximately $30 million.
Interestingly, the trader had amassed his position between April 5 and April 10 through four 5 million ENA withdrawals from Binance. As per a Lookonchain report, the acquisitions led to a 23.24 million ENA position valued at $30 million, with an average price of $1.29 per token.
Subsequently, the Ethereum (ETH) address ‘0x886b70db1A5Ec9DA60231D3A059b640dB7f116ed’ staked the freshly acquired ENA, becoming the token’s largest staker, enticed by the yield.
However, this strategy backfired, resulting in a consistent two-month price decline since the peak when the crypto trader procured the tokens. Consequently, the trader unstaked a position then valued at $17.3 million and sold 19.36 million at a loss. At the time of Lookonchain’s publication, the capitulation amounted to $14.1 million, with ENA priced at $0.71.
Ethena whales have been shedding their tokens since reaching an all-time high in April. Finbold’s data from Santiment revealed that addresses holding between 10 million to 100 million ENA tokens collectively possessed 459 million ENA on April 8, which diminished by 33% to 305 million ENA by June 12.
Notably, Ethena garnered attention at that time, supported by renowned crypto traders and investors like Arthur Hayes. This increased visibility raised concerns and drew parallels with Terra (LUNA), which endorses an algorithmic stablecoin, as reported by Finbold in April.
In essence, Ethena is a protocol established on Ethereum featuring a governance token, ENA. Ethena’s objective is to serve as “the internet bond,” offering a synthetic dollar, USDe, and “internet native yield.”
Nonetheless, predicting whether Ethena will achieve significant success or undergo a drastic failure remains uncertain. Investors involved with USDe must comprehend the risks and make informed decisions going forward.
Please note: The information presented in this article should not be construed as investment advice. Investing carries inherent risks, and your capital is subject to potential loss.