Original Author: Luke, Mars Finance
On April 9, 2025, a wallet allegedly linked to World Liberty Financial (WLFI) sold 5,471 ETH at an average price of $1,465, cashing out approximately $8.01 million. This is no small matter - previously, this wallet had invested $210 million to accumulate 67,498 ETH at an average price of $3,259, now facing an unrealized loss of around $125 million. As a DeFi star project endorsed by the Trump family, WLFI's move is puzzling: Why sell at this moment? How much ETH can they still sell? Will they continue to sell in the future?
Difficult Choice in a Cold Market
Currently, the crypto market is shrouded in cold air, with ETH price shivering between $1,465 and $1,503, more than halving from WLFI's purchase price. Recalling early 2025, the optimistic sentiment from Trump's inauguration once led WLFI to heavily increase ETH holdings, seemingly ready to soar with policy tailwinds. Unfortunately, ETH's continued sluggishness has turned this enthusiasm into a massive unrealized loss of $125 million. From $89 million in March to $125 million now, the loss snowball keeps growing.
The timing of the sale is intriguing. On the same day, a whale bought 4,677 ETH at $1,481, with market bulls and bears in fierce competition. WLFI's choice to act now might be sensing a short-term bottom or fearing further price decline. Regardless, this $8.01 million cash-out is like selling an old coat in winter - reluctant, but unavoidable.
Why Sell: Stop Loss or Something Else?
Why is WLFI cutting losses at this point? There might be multiple reasons.
First, the stop-loss logic is obvious. With ETH dropping by $1,794 per coin, selling 5,471 coins means losing nearly $10 million, but it's better than watching the remaining 62,027 coins continue to depreciate. It's like cutting a "failed stock" in the stock market, saving cash first. After all, if liquidated at current prices across the board, the loss would approach $111 million - who could bear that?
Secondly, cash flow pressure cannot be ignored. WLFI enjoyed a period of glory with $590 million in token sales, but operational, collaborative, and new project expenses won't stop. $8.01 million might not be much, but it can relieve urgent needs during market downturn. Think about it, a project backed by the Trump family can't let its wallet run empty, right?
Moreover, this might be a trial for strategic pivot. WLFI's asset pool isn't just ETH, but also includes "veterans" like WBTC, TRX, and "newcomers" in the RWA field. Reducing ETH holdings and freeing up funds to invest in partners like Ondo Finance or bet on Layer 2 potential could be a preemptive move. After all, DeFi's stage is big, and ETH is just one character.
Lastly, don't forget external perspectives. As the "favored child" of the Trump family, WLFI has a halo but also carries controversy. With 75% of profits going to the family in the whitepaper and risks passed to token holders, this model has long been suspicious. Could this sale be due to investor pressure, proving they're not just riding on "celebrity effect"? Unlikely, but not unreasonable.
Overall, stop-loss and liquidity are the most direct drivers, with strategic adjustment as a potential subplot. External pressure might just be background noise.
How Much More Can They Sell: Bottom Cards and Bottom Lines
After selling 5,471 coins, WLFI still holds 62,027 ETH, worth about $90.9 million at current prices. How much can this bottom card reveal?
From a funding perspective, if targeting around $8 million in cash flow per sale, selling about 5,000 coins would suffice, leaving a "safety line" of $56 million. But if there are larger funding gaps, such as new project launches or debt maturity, selling 10,000-20,000 coins isn't impossible. However, this would question ETH's core position.
Market absorption is also crucial. This $8.01 million sale didn't cause much disruption, with ETH's daily trading volume of $5 billion seemingly able to absorb it. But if WLFI dumps tens of millions of dollars at once, panic could exacerbate price decline. Cautiously, small-scale batch sales seem more like their style.
More importantly, strategic bottom line. WLFI views ETH as a "strategic reserve". If holdings drop below half (around 33.74 million coins), their DeFi leader image might waver. Unless absolutely necessary, they likely won't easily play this card. In the short term, selling another 5,000 to 10,000 coins (about $7.3 to $14.65 million) is a reasonable guess - quenching thirst without breaking bones.
Will They Continue Selling?
Will WLFI continue to reduce holdings? The answer lies in three clues.
First, market mood. If ETH drops below $1,400 and unrealized losses grow by $10-20 million, selling impulse might be hard to control. But if prices rebound to $1,800 and unrealized losses shrink to $90 million, they might hold tight and even repurchase confidence. Currently, the $1,450 support and $1,600 resistance are wind vanes.
Second, internal calculations are crucial. If WLFI wants to remain a DeFi protagonist, ETH's position can't be too badly damaged, so sales might gradually slow. But if they eye other trends like RWA or emerging tokens, ETH could become a "cash machine", accelerating reduction pace.
Third, external winds. Trump government's pro-crypto policy is WLFI's shield. If major moves land in Q2 and market recovers, they might sit back. But if the family gets caught in political storms or investors demand transparency, cash-out pressure becomes inevitable.
In the short term (1-2 months), small-scale sales are likely, potentially totaling $10-20 million. If market continues to struggle, medium-term reduction might be 30-50% of remaining holdings, around $27-45 million. Long-term, unless ETH completely turns around, WLFI might gradually fade from this arena, moving chips to new battlefields.
Ethereum's Fundamental Changes: Why Are Whales Turning Pessimistic?
Ethereum's fundamentals seem to be quietly undergoing a transformation, which might be the key reason for whales turning pessimistic. Glassnode data shows that in the past four years, Ethereum's active address count has almost stagnated, hovering at the same level without significant growth during market waves. This isn't a "efficiency range" of technical optimization, but more like exhaustion of growth momentum, showing Ethereum's fatigue in attracting new users and developers.
Meanwhile, the rise of Layer 2 (L2) solutions should have brought new vitality to Ethereum, but unexpectedly weakened its value capture capability. L2 significantly reduced mainnet gas fees by diverting transaction volume (gas fees dropped over 70% in March 2025), which, while user-friendly, caused the value originally intended to be returned to ETH holders through the EIP-1559 burning mechanism to be intercepted by L2, further compressing Ethereum's "profit space". Some analyses suggest that unless the mainnet can revive demand for block space through measures like large-scale tokenization, Ethereum's long-term competitiveness may be at risk.
Institutional perspectives also reflect this concern. CoinShares noted in a report that frequent adjustments to Ethereum's protocol economics (such as the Dencun hard fork) have brought uncertainty, hindering institutional investors from building reliable valuation models and thus weakening its attractiveness. In March 2025, Standard Chartered lowered Ethereum's 2025 price target to $4,000, citing its structural decline.
Jon Charbonneau, co-founder of crypto investment firm DBA, also stated that Ethereum's issuance model under Proof-of-Stake (PoS) has fundamental trade-off issues that are difficult to resolve. On X platform, some users even directly stated that Ethereum has "basically not changed since 2016", with slow upgrades and missed opportunities for rapid transformation, seemingly becoming a "victim" of its own success.
Simultaneously, EigenLayer's Stakedrop event also disappointed the market, with the reStaking narrative intended to boost ETH holding returns broken due to unfair distribution, further undermining large investor confidence. These signals collectively point to a reality: Ethereum's fundamentals are being eroded by internal and external factors, and its once-powerful growth engine is showing signs of fatigue. The pessimism of large investors may be a direct reflection of this trend.
Summary
This selloff not only exposed WLFI's struggle in the market downturn but also reflected Ethereum's deeper challenges. Stagnant active address growth, L2 value diversion, and institutional bearish signals have cast a shadow over Ethereum's fundamentals, with large investors' confidence wavering. WLFI's next move, whether continued selling or strategic pivot, will unfold in the dual game of market and policy.
For investors, while chasing the halo is tempting, a calm judgment is more crucial: Can Ethereum reignite its vitality? Where will WLFI's bold bet lead? Perhaps only time will reveal the answer.
