Behind WLFI's selling of ETH: Is there any other plan?

Author: Luke, Mars Finance

On April 9, 2025, a wallet suspected to be linked to World Liberty Financial (WLFI) sold 5,471 ETH at an average price of $1,465, cashing out about $8.01 million. This is not a small fuss - this wallet had spent $210 million and stocked up 67,498 ETH at an average price of $3,259, and now it has a floating loss of $125 million on the books. As the DeFi star project endorsed by the Trump family, WLFI's move is confusing: Why is it cutting its wounds at this critical moment? How much more can I sell the ETH in my hand? Will we continue to sell in the future?

The difficult choice in the cold wind of the market

Currently, the crypto market seems to be shrouded in cold air, with ETH price trembling between US$1,465 and US$1,503, more than half of the WLFI purchase price. Looking back at the beginning of 2025, the optimism brought by Trump's inauguration caused WLFI to increase its holdings in ETH, as if it wanted to soar through the policy wind. Unfortunately, the good times did not last long, and the continued downturn of ETH turned this passion into a huge floating loss of 125 million. From 89 million in March to 125 million today, the snowball of losses is getting bigger and bigger.

The timing of selling is intriguing. On the same day, a giant whale bought 4,677 ETH at the bottom of US$1,481, and the market's long-shou game was in full swing. WLFI chose to take action at this time, perhaps because he smelled the short-term bottom, or perhaps because he was worried that the price would continue to fall. In any case, the cash out of 8.01 million is like selling an old coat in the cold winter - I don’t want to give up, but there is nothing I can do.

Why sell: Stop loss or other plans?

Why does WLFI cut its flesh at this node? There may be more than one answer.

First of all, the logic of stop loss is obvious. ETH fell by $1,794 per piece, and although it lost nearly 10 million in selling 5,471 pieces, it was better than watching the remaining 62,027 pieces continue to depreciate. It's like cutting off a "unfinished stock" in the stock market and keeping the cash first. After all, if the entire position is liquidated at the current price, the loss will be close to 111 million. Who can withstand it?

Secondly, the pressure of cash flow cannot be ignored. WLFI has been booming with 590 million token sales, but the expenses for operations, cooperation and new projects will not stop. Although 8.01 million is not a big deal, it can solve urgent problems when the market is in a low position. Think about it, a project that is backed by the Trump family can't leave your wallet empty, right?

Furthermore, this may be a strategic turnaround test. WLFI's asset pool is not only ETH, but also "veterans" such as WBTC and TRX and "rookies" in the RWA field. Reducing ETH, freeing up funds to invest in partners like Ondo Finance, or betting on the potential of Layer 2, is not a rainy day. After all, DeFi’s stage is big enough, and ETH is just one of the characters.

Finally, don't forget the external perspective. As the "own son" of the Trump family, WLFI has a halo on his head, but he is also controversial. 75% of the profits in the white paper belong to the family, but the risks are left to token holders. This model has long been suspicious. Could this sale be forced by investors to prove that it is not just relying on the "celebrity effect" to make a living? The possibility is not great, but it is not unreasonable.

Overall, stop loss and liquidity are the most direct driving forces, and strategic adjustments are potential foreshadowing. As for external pressure, it may be just the background sound of this scene.

How much more can you sell: trump card and bottom line

After selling 5,471 pieces, WLFI still holds 62,027 pieces of ETH in his hand, which is worth about 90.9 million at the current price. How much more can this trump card be taken out?

From the perspective of capital demand, if each sale targets about 8 million cash flow, it is enough to sell about 5,000 pieces, and the position can still be left with a "safety line" of 56 million. But if there are bigger funding holes, such as the launch of a new project or the debt expires, it is not impossible to sell 10,000 or 20,000 yuan. However, in this way, the core position of ETH has to be questioned.

Whether the market can be taken over is also the key. This time, the 8.01 million sale did not cause much trouble, and the daily trading volume of ETH seemed to be able to digest. But if WLFI throws out tens of millions of dollars in one go, the panic may make the price worse. On the prudence, selling small-scale sales in batches is more like their style.

What’s more important is the strategic bottom line. ETH is regarded as a "strategic reserve" by WLFI. If the position falls below half (about 33.74 million), its image as a leader in DeFi may be shaken. Unless they have to, they should not easily play all this card. In the short term, it is a reasonable guess to sell 5,000 to 10,000 pieces (about 7.3 million to 14.65 million) and not to hurt the bones.

Will you continue to sell?

Will WLFI continue to reduce its holdings in the future? The answer is hidden in three clues.

First, look at the market's expression. If ETH falls below $1,400, and the floating loss rises by another 10 or 20 million, the impulse to sell may not be suppressed. But if the price rebounds to $1,800 and the floating loss shrinks to 90 million, they might hold their pockets tightly and even buy back some confidence. Right now, the $1,450 support and $1,600 resistance are the weather vane.

Second, internal planning is also very critical. If WLFI still wants to play the leading role in the DeFi circle, ETH's status cannot be lost too badly, and the sale may gradually slow down. But if they target other trends, such as RWA or emerging tokens, ETH may become an "ATM" and the pace of share reduction will accelerate.

Third, external turmoil. The Trump administration's pro-cryptocurrency policy is the amulet of WLFI. If a big move is implemented in the second quarter and the market recovers, they may firmly sit on the Diaoyutai. But if the family is involved in a political storm or investors are forced to ask about transparency, the pressure of cashing out will not be eliminated.

In a short period of time (one or two months), there is a high possibility of a small-scale sell-off, with a total amount of between 10 million and 20 million. If the market continues to be sluggish, the medium-term reduction may account for 30%-50% of the remaining positions, that is, 27 million to 45 million. In the long run, unless ETH completely turns over, WLFI may slowly fade out of this position and move the chips to the new battlefield.

Changes in Ethereum’s fundamentals: Why do big players turn into

pessimism?

The fundamentals of Ethereum seem to be undergoing a quiet change in recent years, which may be an important reason why big players are becoming pessimistic about the ETH prospects. Glassnode data shows that the number of active addresses in Ethereum has almost stagnated in the past four years, and has always hovered at the same level, failing to grow significantly with the market boom. This is not the "efficiency range" of technology optimization, but more like the exhaustion of growth momentum, showing the fatigue of Ethereum 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-capturing capabilities. L2 significantly reduced the main network's Gas fee through diversion transaction volume (gas fee dropped by more than 70% in March 2025). Although this is user-friendly, it has caused the value of the original ETH holder to be rewarded through the EIP-1559 combustion mechanism to be intercepted by L2, further compressing Ethereum's "profit space". Some analysts pointed out that unless the main network can revitalize the demand for block space through large-scale tokenization and other means, Ethereum's long-term competitiveness may be at risk.

The institutional viewpoint also reflects this concern. CoinShares noted in a report that frequent adjustments to the Ethereum protocol economy, such as the Dencun hard fork, brought uncertainty, which hindered institutional investors from building reliable valuation models, thereby weakening its appeal. In March 2025, Standard Chartered lowered Ethereum's 2025 price target to $4,000, citing its structural recession.

Jon Charbonneau, co-founder of crypto investment firm DBA, also said that Ethereum's issuance model under the Proof of Stake (PoS) mechanism has fundamental trade-offs and adjustments are difficult to resolve core contradictions. On the X platform, some users even bluntly stated that Ethereum "has basically not changed since 2016", with slow upgrades and missing a window for rapid transformation, becoming a "victim" of its own success.

At the same time, EigenLayer's stake drop incident also disappointed the market. The narrative that should have boosted ETH holding income through restaking (restaking) has broken down due to unfair distribution, further hitting the confidence of big investors. These signals together point to a reality: Ethereum's fundamentals are being eroded by internal and external factors, the former growth engine has shown signs of fatigue, and the pessimism of large investors may be an intuitive response to this trend.

summary

This sell-off not only uncovers WLFI's struggle in the market cold wave, but also reflects the deeper dilemma of Ethereum. The stagnation of active address growth, L2 diversion value, and institutional declining signals have cast a shadow on the fundamentals of Ethereum, and the confidence of big investors is shaken. The next step of WLFI, whether it is continuing to sell or strategic shift, will be carried out in the dual game between market and policy.

For investors, chasing the halo is tempting, but it is necessary to make a calm judgment: Can Ethereum's future rekindle? Where will WLFI’s gamble go? The answer may only be revealed.