Jump Crypto, one of the high-profile investors and market-makers, chose an illiquid weekend to unravel not only Ethereum (ETH) but all token positions. Jump Crypto selling aims to liquidate all tokens and switch to stablecoins.
Jump Crypto, the Web3 subsidiary of Jump Trading, chose a volatile, low-volume weekend to start divesting Ethereum (ETH) and tokens. In addition to selling ETH since July 25, Jump Crypto also reshuffled its wallets in the past 24 hours and divested even small token-based positions.
Jump Crypto has also raised suspicions of using algorithmic trading to speed up Bitcoin (BTC) crashes. The recent market moves could reflect directed selling orders by Jump Crypto, with the goal to destabilize the market and trigger liquidations. Similar activity has been noted through Jane Street Group, which also moved tokens to exchanges in the past weeks.
ETH will have to absorb additional selling from Jump Crypto, based on still-available wallet holdings. After the news of the Jump Crypto dumping, ETH still managed to recover to $2,265.65, after sliding to $2,180.
Money flows show Jump Crypto sold off ETH holdings
Recent money flow data shows Jump Crypto has liquidated $91M in Ethereum since the weekend started, with more waiting in the Lido DAO unstaking queue. When it comes to unstaking, Jump Crypto is not the only entity putting pressure on the ETH market. There are 50,000 stETH waiting to be unstaked from Lido DAO and possibly enter spot markets.
Jump Crypto may have up to 120K stETH to unstake and move to centralized exchanges. Preliminary data shows that more than 38K ETH has already been moved. Jump Crypto joined a wider trend of unstaking ETH, where waiting times have started to grow. Lido DAO aims to stop rapid unstaking with a cooldown period, which starts to increase with too many demands.
As a result of the selling, Jump Crypto increased its balance of USDC to $600M, up from $82M at the end of July. In the past week, their USDT holdings also increased from $39M up to $120M, as shown through Arkham’s on-chain research.
As of August 5, Jump Crypto was in the process of collecting the stablecoins from exchange wallets, receiving 231K USDC and inflows of up to 117.12K USDT, along with smaller transfers.
Jump Crypto now owns more than $586M in other positions, though the past 24 hours saw even small-scale selling of SHIB tokens on centralized exchanges.
Jump Crypto angers other traders
The decision to liquidate ETH holdings angered other traders, which see the move by Jump Crypto as contributing to the crash of ETH under $2,200. The selling happened without a warning, after Jump Crypto had frozen its social media communication.
On-chain data and the previous history of unstaking and selling ETH are linked to the overall stagnant price performance. Jump Crypto is also seen as partially responsible for selling and expanding the ETH slide to 30%.
Jump Crypto has not shown readiness to unwind all positions, and in fact continues its main tasks of also serving as a VC fund. Jump Crypto was also active during the 2020-2021 bull market, where it worked alongside FTX and Alameda research before its crash. However, Jump Crypto survived the $300M loss incurred by the crash of FTX.
The trading and investment platform still has to face an investigation from the US Securities and Exchange Commission (SEC). Jump Crypto has not been accused of wrongdoing, but is still researched for its role in supporting Terra (LUNA).
Recently, Jump Crypto also divested from the Wormhole project, where it offered $320M in support to erase a major bridge hack. Since 2023, the parent company Jump Trading has also hinted at downsizing its crypto operations. Jump Crypto also removed its president Kanav Kariya at the end of June, about a month before the beginning of selling.
Jump Crypto also affected the token price of Pyth Network. Pyth was created as a spinoff from part of the Jump Crypto team after abandoning Wormhole. PYTH slid to an all-time low of $0.22.
The latest investment by Jump Crypto was into Play AI, a Web3 and gaming startup. Jump Crypto provided $4.3M in seed capital. The fund is in rounds of $1M – $3M at multiple development stages.
Cryptopolitan reporting by Hristina Vasileva
