In the cryptocurrency trading universe, not much happens without the say-so of whaling institutional investors.
These big players hold massive amounts of certain tokens and can move the markets with just a few keystrokes. Hello, Kraken!
Recently, one of these ‘whales’—famous in the crypto hoarding scene, Schnibbles the Whale, last known to be hoarding large amounts of the two prominent tokens, UNI and AAVE—made a major move. Schnibbles transferred massive amounts of the Uniswap (UNI) token to the crypto exchange, Kraken. If your first reaction is to suggest that Schnibbles might be preparing for a market downturn, don’t.
The Whale’s Massive UNI Holding: From Profit to Loss
As of 2023, this whale has obtained a remarkable 2.248 million pieces of the UNI token, which at the current market price is equivalent to about $13.71 million. The average price the whale paid for the tokens was $6.91 per piece, which indicates a not stupid at all long-term investment strategy. And even though the whale’s potential profits have, in recent months, fallen from the peak of a staggering $26.38 million to a much more manageable—for the whale, at least—$13.71 million (if he sold today), he is still an underwater whale that has, in the past three years, lost an a**t of $1.84 million.
Transferring all 2.248 million UNI tokens to Kraken in just half an hour signals that this whale is either repositioning into other assets or gearing up for a not-so-secret liquidation on a centralized exchange. Despite the current downward trend in UNI’s value due to market conditions, this whale is still sitting on an extremely large amount of the token, with the prospect of future volatility providing a possible way to recover.
Moving the assets to Kraken brings up the question: Is the whale planning to sell? Is he hedging against potential losses? Or is he planning to invest elsewhere in the market? Transforming that much amount, 4.3 million in total, into liquid tokens could influence the token’s price on exchanges, especially if the whale kicks off a fire sale anytime soon.
AAVE Holdings Still in the Green Despite UNI’s Struggles
Even though the whale’s UNI investment has seen a substantial drop in value, its AAVE holdings are doing quite well. The whale had amassed 142,000 AAVE tokens at an average price of $82.05 per token. AAVE, the governance token of the Aave protocol, has seen much better days compared to $82.05, and the decision to acquire this governance token at such a relatively low price has paid off handsomely in the form of a substantial open profit.
At the height of the situation, the whale’s AAVE position had an unrealized profit amounting to $42.97 million, a unrealized gain and a remarkable profit-taking point. But what goes up must come down. And in this bear market for most cryptocurrencies, the whale’s current unrealized profit on AAVE is just $14.08 million. And while that’s still quite awesome and impressive, it’s not nearly as awesome or impressive as almost $43 million. The whale’s decision to accumulate AAVE in this market and hold onto the asset has been judged to be quite prudent, in fact, much more so than the whale’s decision to accumulate UNI and hold onto it.
Even amid a volatile market, AAVE still maintains a strong floating profit. This, of course, speaks well of AAVE as an asset and shows it to be resilient. But the more interesting point, to us, is that this is a whale’s way of showing AAVE to be a solid performer in a 15-asset portfolio. The whale seems to be publicly testing AAVE against a downturn in UNI’s price, which is a good way of showing the contrast in performance of the two assets.
What’s Next for the Whale?
The whale’s actions in transferring massive amounts of UNI to Kraken and in retaining AAVE reflect a much more common practice that institutional investors have when staring down the barrel of an uncertain crypto market. This could be a sign that the whale moving UNI to an exchange is either anticipating significant market changes or is readying itself for a potential liquidation.
Meanwhile, the whale’s alleged holding of UNI suggests that, losses notwithstanding, it’s still betting on favorable market conditions in the not-too-distant future, when the token’s price might rise above $5.74.
Conversely, the AAVE holdings are in a more secure position, showing the advantages of having a diversified portfolio in the dangerously speculative world of cryptocurrencies. It is likely that the whale will use the gains from AAVE to offset its losses in UNI or reinvest the funds into other assets while it keeps a close watch on the market’s wild oscillations.
At the moment, the crypto community is on high alert, observing this whale as it handles its huge stash of assets. If the whale goes for a market dump of its big UNI bag, if it keeps on holding, or if it decides to hoik assets elsewhere (maybe into more stable, less volatile parts of the crypto sector), it’ll affect crypto traders far beyond the whale’s little koi pond.
Disclosure: This is not trading or investment advice. Always do your research before buying any Metaverse crypto coins.