The price of Ethereum (ETH) has dropped about 33 percent in the previous seven days, and it is currently trading at $1,239. On the morning of June 13, the cryptocurrency market became even more panicked as the Celsius lending platform halted deposits, withdrawals, and transactions due to a lack of liquidity to meet customer needs. Since then, the price of ETH has plummeted, and it now has the lowest value since January 2021.
Fears over the token are triggering panic selling of ETH and other cryptocurrencies. Worse, its use as collateral by key crypto lending platforms is threatening to liquidate billions of dollars’ worth of assets.
Three Arrows throws a reverse card
Three Arrows, a venture capital firm, swapped $33 million worth of Lido Staked Ethereum (stETH) for Ethereum on the DeFi platform Curve on Tuesday. The move comes as stETH values in secondary marketplaces diverge further from ETH pricing, putting pressure on traders using the DeFi token as collateral.
Since last week, Three Arrows is the second large holder of stETH to dump the coin. Last Monday, crypto trader Alameda Research exchanged all of its token holdings for ETH, totaling around $1.5 billion. That trade, which also happened on Curve, is most likely to blame for stETH’s divergence from ETH.
According to crypto analyst @mhonkasalo, while the $33 million swap represents a significant portion of Three Arrows’ stETH holdings, the company still has roughly $22 million of the currency in one of its wallets.
Three Arrows has been consistently unloading stETH for the past month, according to on-chain statistics. The venture capital firm now looks to be putting the ETH it has obtained into AAVE and Lido loan pools.