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. The smart whale withdrew 10M $DAI from @MakerDAO and bought 5,403 $stETH again at an average price of $1,851 6 hrs ago.https://t.co/rIWyjsfRpf pic.twitter.com/aGwmc46gmc — Lookonchain (@lookonchain) August 10, 2023 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. Related Reading: Lido’s ETH Deposits Reach Record High Amid Stagnant stETH Withdrawals 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. Related Reading: Ethereum: Is Lido (LDO) Doomed To Repeat Three Arrows Capital’s Fate? 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. Featured image from Unsplash, Chart from TradingView
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