If you’ve been on Crypto Twitter in the past year, you’ve probably seen a lot of discussions about Bitfinex’s Ethereum market.
Bitfinex publishes a live feed of the number of longs that are open in its markets. Analysts had noted that there was a strong influx of Ethereum longs over the past year. It reached a point where a tangible amount of ETH (over 1.5 percent of the circulating supply) was locked into Bitfinex longs.
$ ETH ppl long for @bitfinex as it looks
new ATH for long OI pic.twitter.com/tOk5F2LI1U
– # 33kByYesterday (@CarpeNoctom) November 19, 2020
Some considered it a glitch, even though analysts said those positions in the second largest cryptocurrency were legitimate. Equally interesting is that the Bitfinex whale that opened this position has started closing it in an attempt to secure its profits.
The great Ethereum is closed by a whale
As the crypto asset analyst “Light” noted, the $ 1.7 billion that an unknown company has long opened on Bitfinex has shrunk in recent days due to a so-called “claim”.
A claim on Bitfinex is that a margin trade is converted to an exchange trade, which means that the cost of raising capital to the lender is paid.
The long opened from February and March, suggesting that this investor has been bullish on Ethereum since trading below $ 200 in early 2020. At the current price of $ 1,200, this investor is up over $ 1 billion from this position.
~ 1.4 million ETH ($ 1.7 billion) has long been claimed on BitFinex. Has been built since February-March. The majority of the size was set at under $ 200, over $ 1 billion in pnl.
Interesting time to close 1 month before CME futures and start below ATH but at an interest rate of $ 1200. pic.twitter.com/ZUMmHyGvoq
– light (@lightcrypto) January 9, 2021
This position closure comes at an interesting time, as Light notes.
In February, the CME is expected to release CFTC-regulated futures for the Ethereum market. This will be one of the first times institutions will be able to get meaningful exposure to Ethereum.
Analysts have therefore argued that this is critically positive for the ETH price. As analyst and economist Alex Krüger explained:
“Most people remember how Bitcoin peaked in 2017 the very day the CME $ BTC futures hit the market and crashed right afterwards. You forget that the CME launch raised the price from 6,000 to 20,000 + 225% in 2.5 months. The introduction of CME $ ETH futures is extremely optimistic. “
On the other side of that coin, however, analysts note that the market is clearly in a period of euphoria and price movement is beyond what many believed possible months ago.
Earlier this week, Michael Novogratz, Galaxy Digital CEO and former Goldman Sachs partner, said Bitcoin was ready to pull back after the 100 percent rally over the past four weeks.
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