Ethereum is undergoing the most significant change since its peak in August.
Since October 6, a sharp double-digit correction of more than 35% has triggered a conviction crisis, torn apart the market’s speculative class and forced a wave of liquidations.
However, the on-chain story is not a simple collapse. This is a major rebalancing of who controls the supply of ETH.
The data shows that typical deleveraging events collide with structural accumulation trends. This will occur as long-term holders sell and leveraged traders are purged, resulting in the creation of a new class of institutional bonds that are indifferent to short-term panics and systematically absorb ETH supply.
Old ETH holders sell when leverage is released
For the first time since early 2021, the population of older Ethereum investors is largely dispersed.
According to Glassnode, ETH holders with holding periods between 3 and 10 years have increased their daily realized spending by over 45,000 ETH on a 90-day moving average, a level not seen since February 2021.
This cohort represents some of the earliest and most profitable ETH investors. Their increased spending does not indicate panic, but rather reflects savvy investors profiting during volatility.
A prime example is the recent activity of Ethereum ICO participants. On November 17, blockchain analytics platform Lookonchain reported that 0x9a67 had transferred 200 ETH (approximately $626,000) after more than a decade of inactivity.
This wallet invested just $310 to receive 1,000 ETH in a 2014 ICO, and its current holdings are worth over $3.13 million, representing a 10,097x return.
Meanwhile, this “old money” profit-taking is compounded by the devastating unwinding of leveraged positions.
As background, prominent trader Mr. Machi was liquidated again as the price fell, contributing to a total trading loss of over $18.9 million. In a sign of the market’s intense volatility, he immediately resumed a new long position of 3,075 ETH ($9.6 million) at a liquidation price slightly below the current market, demonstrating the high-risk and chaotic nature of speculative unwinding.
Adding to the commotion, other celebrities were also seen selling, including Arthur Hayes.
However, the most important event involved the “whale who borrowed 66,000 ETH.”
Blockchain platform Onchain Lens reported that its highly leveraged Aave V3 position came under intense pressure as the price fell, forcing it to withdraw 199,720 ETH (approximately $632 million) to prevent forced liquidation.
The whale then transferred over 44,000 ETH to Binance to close the position. Estimated losses exceeded $70 million, making it one of the largest single risk-off events of the cycle.
institutions absorb supply
The other side of this redistribution is the emergence of institutional-level buyers building large ETH vaults. These are accumulators, not traders.
BitMine, the digital asset treasury firm chaired by market strategist Tom Lee, has expanded its holdings to 3.5 million ETH. This represents 2.9% of the total ETH supply, meaning the company has achieved more than half of its goal of accumulating 5% of all ETH in circulation.
BitMine is not a hedge fund trading cycle, but a corporate treasury denominated in ETH. The company’s stated goal is to accumulate and bet on supply, turning passive balance sheet assets into long-term yield generating power plants.
As a result, the company has aggressively acquired ETH holdings and is now the largest public holder of the digital asset.
SharpLink, another growing ETH vault, reflects this strategy. The company currently holds 859,400 ETH (valued at $2.74 billion) and has earned over 7,067 ETH in staking rewards since mid-2025.
Together, BitMine and SharpLink currently manage over 4.35 million ETH. Their programmatic accumulation acts as a structural floor, permanently removing this supply from volatile and liquid markets and locking it into staking contracts.
However, this systematic institutional accumulation stands in sharp contrast to the wave of retail-led exits.
The Spot Ethereum ETF has seen its largest monthly outflows in history, with more than $1.2 billion outflows this month, according to data from SoSo Value.
This contraction has created a mixed and chaotic liquidity situation.
ETF investors, who are often more price sensitive, are selling out of fear. Leveraged traders are being forced into liquidation. At the same time, long-term holders are reaping multi-cycle gains, providing the very supply that new institutional investors are absorbing programmatically for long-term use.
This interaction is why the recent adjustment feels chaotic, even though the basic mechanism of the transition from a weak reactive hand to a strong programmatic hand is consistent with the reset of previous cycles.
super cycle theory
Lee, BitMine’s executive chairman, argues that this disruption is a necessary step in the emerging ETH “supercycle.” Lee draws a direct parallel to Bitcoin, which he first recommended to Fundstrat customers in 2017 at a price of about $1,000.
“We believe ETH is also embarking on the same supercycle,” Lee said. “In order to benefit from Bitcoin’s 100x rise, we had to endure an existential moment.[So current crypto prices]are simply discounting a huge future.”
According to institutional theory, that “huge future” is Ethereum’s established role as the primary payment layer of the global economy.
The bull case for companies like BitMine and SharpLink is simple. Ethereum is the only chain that all major cryptocurrency economies actually settle on.
The entire ecosystem of stablecoins, layer 2 scaling solutions (L2), perpetual derivatives, real world assets (RWA), and institutional custodial flows are all connected to create demand for ETH.
Lee sees the sharp retracement as not a structural failure, but rather a characteristic of assets moving from pure speculative to macro-related.
Taken together, the data reveals that the market is in the midst of a major post-merger restructuring. This is not a simple drawdown. This is a redistributive event in which supply moves from short-term, reactive hands to long-term, structurally committed hands.
