Whales Bet on ETH: $2.5B Staked Overnight

PLUS: Bitcoin slips under $110K, $940M liquidations hit markets, and a “Made in America” ETF enters the race.

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Cryptopolitan News
August 26, 2025 • Estimated Reading Time: 9 minutes

🐋 Whales rotate from BTC to ETH: $2.5B staked overnight

The tide may be turning in crypto’s biggest rivalry. For the first time in years, long-term BTC whales are unloading Bitcoin and rotating into ETH.

According to Arkham Intelligence, one entity bought $2.5B worth of ETH from Hyperliquid’s Hyperunit hot wallet and instantly sent it into staking. The move alone spiked Ethereum’s validator queue by more than 450K ETH, while nearly 906K ETH remain lined up for withdrawal.

ETH whale buying boosted the inflows to the validator queue, as one large entity acquired $2.5B worth of ETH and sent it for staking.

📊 The numbers:

  • ETH/BTC ratio hit a one-year high above 0.042 BTC

  • ETH dominance: 13.8%

  • BTC dominance: 56.6%

  • ETH price: $4,400+, holding firm despite rejecting a fresh ATH

💡 Why it matters

This isn’t just whales buying a dip. It’s a structural rotation. BTC saw six straight days of outflows from ETPs, while ETH accumulation wallets and staking deposits surged. Even BlackRock and Grayscale are quietly adding ETH alongside BTC.

Ethereum isn’t just being positioned as “digital silver” anymore. With staking, lending, and passive income opportunities, whales may see ETH as the higher-yielding store of value.

⚖️ The bigger context

  • Hyperliquid effect: The whale used Hyperliquid to open massive spot and derivatives positions. Daily trading volume hit a record $3.4B, with open interest topping $14B.

  • Old money moves: Some ETH inflows came from “ancient wallets,” signaling even entrenched BTC holders are hedging.

  • Narrative shift: For years, BTC was assumed to fully absorb institutional demand. This whale move says otherwise.

📚 Quick explainers

  • Validator queue: When ETH is staked, it enters a waiting line (queue) before validators can officially start earning rewards. Big deposits = longer queues.

  • ETH/BTC ratio: A key market metric showing ETH’s strength vs BTC. Rising ratio = ETH outperforming.

  • Why staking matters: Unlike BTC, ETH can generate passive income (3–5% annually). For whales, that yield makes ETH attractive during sideways markets.

👉 Takeaway: The “flippening” isn’t here yet, but this $2.5B shift shows ETH is firmly in the conversation as whales reprice risk and hunt yield.

🧠 Signal vs Noise

Canary Capital just filed for a spot ETF that would only hold U.S.-origin tokens. The so-called American-Made Crypto ETF would track a “Made-in-America Blockchain Index” and trade under ticker MRCA if approved.

Here’s the context:

Canary’s filing isn’t about BTC or ETH. It’s about carving a niche:

  • Eligible tokens = created in the U.S., minted mostly in the U.S., or with U.S.-based core ops.

  • Candidates include Uniswap (UNI), Chainlink (LINK), Solana (SOL).

  • The ETF would also try to earn staking rewards where possible.

  • Bloomberg’s Eric Balchunas says this is the start of “ETF combos” flooding the market.

But the red flags are clear:

  • Ambiguity over what really counts as “U.S.-made.”

  • Lacks protections of traditional regulated funds.

  • Feels more like a marketing wrapper than investor necessity.

This isn’t about American innovation.
It’s about issuers pushing creative filings to surf the ETF boom.

📢 Signal: The ETF gold rush is accelerating. Expect creative, thematic filings well beyond Bitcoin and Ethereum.
💭 Noise: “Made in America” doesn’t mean safer or smarter exposure, just clever branding.

📈 Chart our analyst is watching

Crypto traders woke up to a sea of red as Bitcoin slipped below $110K, triggering nearly $940M in forced liquidations across the market. ETH traders bore the brunt, with $320M wiped out in 24 hours, while BTC longs lost $277M. SOL, XRP, and DOGE holders weren’t spared either.

Here’s the context:

  • Why $110K matters: A clean psychological + technical level. Breaking it tripped algos, drained order books, and accelerated the cascade.

  • Thin liquidity: ETF outflows + weekend order books = amplified pain. Even small moves snowballed.

  • Volatility regime shift: Deribit’s DVOL is off multi-year lows. Options traders were already hedging for downside.

🔎 What’s next on the watchlist

  • Support levels: BTC $105K–$100K is the next confluence zone.

  • Bounce triggers: ETF inflows, cooler macro headlines, or vol crush post-options expiry.

  • Risks: Persistent ETF outflows + macro shocks = reload leverage on the wrong side, another leg lower.

Top Web3 founders to follow on X

Here are Cryptopolitan’s top picks:

@EMostaque – Former Stability AI CEO. Vocal on open-source vs closed AI, regulation battles, and where AI is really headed.

@karpathy – Ex-Tesla AI lead and OpenAI co-founder. Breaks down complex AI concepts into simple, tweet-sized insights.

@SullyOmarr – CEO of Loveable.ai. Known for daily drops on AI tools that actually work, with quick demos and feedback loops.

@chamath – CEO of Social Capital. Not a pure AI founder, but one of the loudest voices on how AI reshapes venture capital and big tech.

@pmarca – Marc Andreessen, co-founder of Andreessen Horowitz. His threads on AI policy, risk, and opportunity shape how Silicon Valley thinks.

@SoumithChintala – Co-founder of PyTorch. Deep technical insights and early signals on where machine learning is going.

Intern picks: Read these to make him happy

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