The recent transfer of millions of dollars worth of ethereum by Jump Trading to centralized exchanges has destabilized the cryptocurrency market.
Over the weekend, the firm moved 17,576 eth, valued at $46.78 million, to exchanges including Binance, OKX, Coinbase, ByBit and Gate.io, according to blockchain analytics platform Spot On Chain.
This move follows a pattern observed by cryptocurrency analyst x.com/EmberCN/status/1819912925060198753″>Ember CNSince July 25, Jump Trading has converted 83,091 wstETH, worth $341 million, into 97,600 stETH and disbursed 86,059 stETH, worth $274 million, to Lido Finance. The firm subsequently deposited a net 72,213 eth, worth $231 million, to various exchanges.
Typically, these transfers indicate bearish sentiment, suggesting that holders might want to sell their cryptocurrencies. Despite these moves, the firm still holds onto significant assets, including approximately 37,604 wstETH and 3,214 RETH, valued at around $110 million, according to Arkham Intelligence. data.
Meanwhile, another wallet associated with the firm holds around $585 million worth of cryptocurrencies, including USDC and USDT. However, on-chain data shows that the wallet balance dropped by more than 50% last month before recovering to its current balance.
Market impact
Jump Trading shares have contributed to a broader market rout, with major digital assets like bitcoin and ethereum experiencing double-digit declines. Blockchain analyst Lookonchain x.com/lookonchain/status/1820321011730116636″>he pointed that the market has fallen more than 33% since the company began selling on July 24.
Gracy Chen, CEO of Bitget, said: CryptoSlate prominent players like Jump Trading dumping eth and bearish forecasts following ETF approvals played a role in the market crash.
Adam Cochran, managing partner at Cinneamhain Ventures, criticized Jump Trading's operations, x.com/adamscochran/status/1820163631566221375″>stating:
“The sudden liquidation of your cryptocurrency portfolio in thin markets on a summer Sunday afternoon perfectly sums up why your cryptocurrency trading is a disaster.”
Meanwhile, other members of the crypto community speculated that the fund’s move could be a prelude to its impending legal showdown with the U.S. Commodity Futures Trading Commission (CFTC). The financial regulator is investigating the firm’s trading and investment activities within the crypto space. Amid these challenges, the firm’s president, Kanav Kariya, has resigned.
Over the years, Jump Trading has faced numerous challenges, including a $325 million Wormhole hack, losses from the 2022 FTX collapse, and allegations of algorithmic peg manipulation for Terra’s UST stablecoin.
