- ETH whales sell their assets to cover their debt on Aave and Compound
- This could drop the price of ETH, especially against the liquidation of BTC
- Binance will get good fees, and DeFi may prove its value
In just the past two hours, 3 ETH whales deposited and sold 28,558 ETH, worth ~ $82.2M, through Binance.
So, why did it happen, and what effect would it have if we see more cases like this?
Why Would ETH Whales Make Such Moves?
The logic behind it is probably as follows: the whales used ETH as collateral on DeFi platforms. They may have done this to borrow stablecoins to buy more ETH.
However, the market price of ETH dropped noticeably, disrupting their plans and forcing them to urgently sell their assets to pay off their debt and stop losses at current levels.
By default, Binance will receive significant interest from allowing it to liquidate those assets on its platform.
What Could This Mean for the Market as a Whole?
Looking at the situation within the fundamental laws of pricing and market dynamics – the release of a large amount of assets is likely to hurt the already falling price of ETH, and ETH-based altcoins. An additional factor for dropping their price could be the Bitcoin liquidation, which you can also read about in our recent article.
What Does That Say About DeFi?
In addition to this, another point can be noticed. The willingness of the whales to sell assets to pay off debts on DeFi may express a serious attitude towards them. This could be a good sign for those looking for completely decentralized solutions and want to see DeFi as a serious player as a centralized platforms in the crypto economy.
