Since the beginning of February, demand and price for Ethereum, the second-largest cryptocurrency by market capitalization, have increased dramatically. Early today, trading saw Ethereum reach a one-month high of $2,687.
An Ethereum whale has reportedly taken a bold decision to amass ETH since the beginning of February, when its price began to rise from lows of $2,239, according to Lookonchain.
Using revolving loans on the Spark network, which let borrowers take out, return, and redraw money as needed within a set time frame and limit, the whale’s approach involved going long on Ethereum.
https://x.com/lookonchain/status/1757317844436660226?s=20
One platform that offers revolving loans is called Spark. Depositing ETH or other ERC-20 tokens as collateral allows users to borrow stablecoins with variable interest rates, such as DAI or USDC.
Lookonchain reports that since February 1st, the aforementioned whale has borrowed 56.8 million DAI from Spark and taken out 39,900 ETH valued at $99.5 million from exchanges like as Binance, Bybit, OKEx, and Bitfinex, with an average price of $2,492.
It is obvious that the whale wants to expand their income and ETH holdings while paying little interest on the loans.
Whale’s bullish stance is evident
Given the volatility of the cryptocurrency market, the previously indicated method could appear hazardous, but it is clear that the whale is optimistic.
Based on these signs, the whale is effectively taking a punt that the collateral value won’t drop below the liquidation threshold and that the price of ETH will increase more than the interest rate of the loans. A large loss might be incurred by the whale if the price of ETH drops dramatically and they lose their collateral.
The Ethereum network and layer-2 tokens, including MNT, ARB, and LDO, surged on Monday following Franklin Templeton’s filing for a spot Ethereum ETF.
The rise in “altcoins,” or alternative cryptocurrencies, seems to have coincided with the rise in Bitcoin, which hit $50,000 for the first time since late 2021. As of this writing, ETH has increased by 8% to $2,678 during the previous day.
