A major fund’s $750 million loss on a leveraged Ethereum position coincides with critically low exchange supply levels for the token, creating conditions for volatile price movements. Data shows exchange-held ETH has fallen to mid-2016 levels, meaning even modest trading flows could significantly impact the market.
Trend Research, led by Jack Yi, recently unwound one of the market’s largest leveraged Ethereum positions. The firm sold its entire ETH holding, raising $1.74 billion and realizing a loss of approximately $750 million from the original $2.6 billion bet constructed using loans from Aave.
This high-profile unwind occurred as Ethereum’s available supply on exchanges has drastically thinned. According to CryptoQuant data, total ETH reserves across all exchanges have fallen back to roughly 16 million ETH, matching levels last seen in mid-2016. The contrast with Bitcoin is notable, as BTC exchange balances have rebounded to near 2019 levels.
Despite the selling pressure, some entities are accumulating. Bitmine, backed by Tom Lee, added 20,000 ETH worth $41.98 million. Separately, the Infini exploiter also bought the dip, spending 13.32 million DAI to acquire 6,316 ETH.
At press time, Ethereum traded at $2,077, down roughly 37% from recent highs near $3,300. Technical indicators showed bearish pressure dominating, with selling volume expanding during the decline. The combination of large institutional unwinds and historically low exchange liquidity presents a unique market structure for the asset.
