Not everyone makes money in crypto market! Brutal yet true! Most of the traders keep looking at technical indicators, support, resistance, moving averages and yet are not able to book profits.
That’s because they tend to miss one of the easiest yet the most powerful on-chain indicator – Whale Movements. If you wish to have an edge over an average trader, you must keep a very close eye on what are crypto whales buying right now. And, in this article, I will tell you about 4 coins that they whales are massively accumulating right now.
Ethereum Shanghai Upgrade
Before we lay hands on the secret token list of whales, I feel we need to talk about Ethereum’s Shanghai upgrade. That’s because whales are currently buying liquid staking tokens. This upgrade, set to happen sometime in March, is a big deal.
Liquid staking platforms have accepted ETH for staking purposes since way back in late 2020 knowing that a move to Proof of Stake was coming. That’s a long lockup. Shanghai will allow validators to withdraw ETH from their stake. That comes based on EIP-4895.
ANALYSIS: According to data from Blockworks Research, the #Ethereum Shanghai upgrade has boosted the growth of liquid staking tokens, outperforming other digital assets. pic.twitter.com/IcYIVDtx4d
— Coingraph | News (@CoingraphNews) February 7, 2023
You may remember that 32 ETH were required to stake. For many small investors that’s a lot of money. So many delegate their ETH to different platforms including the liquid staking platforms on this list. They let you keep your locked stake but give you a liquid token you can invest elsewhere.
So who benefits when you can withdraw? Besides investors generally who now can do what they want with their money, 2 groups benefit:
- Centralized Exchanges
- Liquid Staking platforms
Centralized exchanges like Coinbase and Binance stand to gain huge from this development. All the exchanges have ETH staking pools. Once all that capital is free to move, many will move it. And moving money generates transaction fees. Coinbase and Binance stand to earn hundreds of millions of dollars in transaction fees. After all, all those billions of dollars have been sitting there doing nothing.
Liquid Staking Platforms
And liquid staking platforms will gain too. They had to invest in all the validator and node technology for almost 2 full years (late 2020 until The Merge in fall 2022) without earning anything on that investment. Now they will be able to earn transaction fees too for moving funds in and out of their staking platforms.
So when you think of it this way, the idea that ETH whales are interested in liquid staking platform tokens makes more sense. They are more aware of ETH platform upgrades and the effects those upgrades will have than anyone else aside from the ETH dev teams themselves.
Coin 1: Lido
The most popular liquid staking option for Ethereum right now is with Lido. Almost $8 billion worth of ETH is staked there. That’s ⅓ of all staked ETH. It’s a huge number.
If there was a proxy for all the locked, staked ETH waiting for withdrawals, then Lido is it. Lido is an important project both for Ethereum and for liquid staking in general. They stake on other chains too like:
- Polkadot and Kusama.
Today Lido contributors are proud to present Lido V2 – Lido’s largest upgrade to date and an important step towards further decentralization. https://t.co/SDxlxCgMNq pic.twitter.com/KJewhEp8rV
— Lido (@LidoFinance) February 7, 2023
They play an important role in getting people to stake to keep their favorite projects secure while having liquidity for other investments. Lido also runs nodes and other important infrastructure. It’s a good Web3 infrastructure play.
To ensure I am not confusing you, the token the whales are buying is NOT Lido Staked Ether (symbol stETH) but it is the Lido DAO token as Lido operates as a DAO. The Lido token symbol is LDO. So this is not a bet on how the liquid staking derivative will do. It’s a bet on the platform itself. After hitting a low of 90 cents in November, Lido has been climbing. It’s up more than 100% from there to its current $2.53.
Coin 2: Rocket Pool
Like Lido, Rocket Pool is a liquid staking platform. They are smaller than Lido but have nearly $1 billion in staked ETH on their platform. And like Lido, they give you the infrastructure so you can stake your own 32 ETH if you have it and run a node there. Or the more popular option, you delegate to them.
The liquid staking token you get here is rETH. While not as widely available as stETH from Lido, you can use rETH is lots of places including Yield Protocol and in lots of pools and farms to earn more interest.
Rocket Pool's mission from day one has been to encourage small & independent home stakers in alignment with Ethereum's core values
We're stoked to reach the milestone of 2000 permissionless node operators spread all across the world! pic.twitter.com/OrYQuvyZWr
— Rocket Pool (@Rocket_Pool) January 26, 2023
Pendle has a terrific pool right now of rETH-wETH which means risk of impermanent loss is almost zero. It’s paying a boosted return of 41% right now. That’s just one of a few good deals using rETH as collateral. But like Lido, again, I know I sound like a broken record here.
But as with Lido, the whales are not buying rETH, they are buying the platform token with symbol RPL. After hitting its bear market bottom of $13.32 in early November, Rocket is up more than 2x to $41,16. An ~50% return from here will get Rocket back above its all-time high of $59 from the last bull market and the trend here is clear. Upwards.
Do you like liquid staking platforms for your funds or your investment like this? Which ones have you used? Let us know in the comments below.
Coin 3: FXS
Frax just passed our #4 coin today to become the 3rd top liquid staker of Ethereum. At Frax, you get frxETH for your ETH.
Frax also has one of the most ambitious stablecoin projects in crypto. Its goal is to take the best aspects of algorithmic stablecoins and use them with the safety of collateral-backed coins. Its stablecoin is called $FRAX. It’s also the only coin on this list not involved with liquid staking.
Autocompounding $frxETH – $ETH LP on @beefyfinance is a great success, TVL rose by 300% in 12 hrs! 🤯@samkazemian pic.twitter.com/I7CkSdukLL
— CryptoThatDoesntSuck (@CryptoThat) February 5, 2023
I know that sounds confusing. But many people like the mint/burn mechanism and potential decentralization of algo stablecoins. But as we saw with UST, most have design flaws. To prevent a bank run style selloff like what happened with LUNA, Frax also backs its coin with USDC.
You can see how much USDC is behind the coin and how decentralized it is right on the Frax dashboard. Today, it’s backed 92% by collateral. And using the minting feature by burning FXS as algorithmic coins do, we see it’s 23% decentralized right now.
Like UST had with LUNA, you mint or burn FXS to create the $FRAX stablecoin. And it’s this coin, FXS, that whales are buying. It’s a sign they are bullish on this stablecoin. Why Because to create more $FRAX stablecoin you have to burn $FXS. That means you removing supply of $FXS. These whales think that burn will add value to the token by reducing the supply so they are buying.
Coin 4: Stakewise
My last coin for today is Stakewise. Here just like the others mentioned today, you stake your ETH and you get a liquid token. In this case, the liquid token is sETH2. Of the 3 liquid tokens, this one has the fewest investment options but there are still some good ones including 2 pools that Stakewise offers.
One offers almost no impermanent loss risk as it’s an ETH-sETH2 pool on Uniswap paying a healthy 12.71%. That’s a great deal. Another involves another ETH derivative token rETH2 and the pool is rETH2-sETH2. This one is also on Uniswap and pays 12.68%. These are excellent returns for the risk you are taking. Risk is low here since both get their value from the underlying Ethereum.
Who are the big DeFi movers to start off the year?
Liquid staking derivatives like @stakewise_io and @LidoFinance are off to a hot start, seeing market cap increases of 65.4% and 47.7%, respectively. pic.twitter.com/oJd73lMQ1z
— Messari (@MessariCrypto) January 21, 2023
And like Lido and Rocket, here the whales are buying Stakewise’s $SWISE platform token, not the sETH2 liquid token. This one is the smallest of the liquid staking platforms with a market value of only $32 million but it has lots of room to grow if you think liquid staking and delegated ETH staking will continue to grow as I do here.
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