Ethereum is experiencing its most significant transition since its August peak.
A sharp double-digit correction of more than 35% since October 6 has triggered a crisis of conviction, tearing apart the speculative layers of the market and causing a wave of liquidations.
However, the channel’s story is not one of simple collapse. This is a large-scale rebalancing of who controls the supply of ETH.
The data shows a classic deleveraging event colliding with a structural trend toward accumulation. This comes as long-term holders sell and leveraged traders are purged, giving rise to a new class of institutional Treasuries indifferent to short-term panic, methodically absorbing the ETH supply.
Former ETH Holders Sell as Leverage Dissipates
For the first time since early 2021, Ethereum’s older investor cohorts are distributing at scale.
According to Glassnode, ETH holders with a holding period of 3 to 10 years increased their spending to over 45,000 ETH per day over a 90-day moving average, a level not seen since February 2021.
This cohort represents some of the oldest and most profitable ETH investors. While their high spending does not signal panic, it rather reflects seasoned investors taking profits amid volatility.
A good example is the recent activity of an Ethereum ICO participant. On November 17, blockchain analytics platform Lookonchain reported that 0x9a67, after more than a decade of dormancy, transferred 200 ETH (approximately $626,000).
This wallet had only invested $310 in the 2014 ICO to receive 1,000 ETH, bringing the current value to over $3.13 million, representing a 10,097x return.
Meanwhile, this “old money” profit-taking is compounded by the catastrophic unwinding of leveraged positions.
To recall, prominent trader Machi was once again liquidated as the price fell, contributing to his total trading losses of over $18.9 million. In a sign of the intense market volatility, he immediately reopened a new long position on 3,075 ETH ($9.6 million) with a liquidation price just below the current market, illustrating the chaotic and high-risk nature of the speculative unwind.
To add to the noise, other personalities, such as Arthur Hayes, were also seen selling.
The biggest event, however, involved the “66,000 ETH Borrowed Whale.”
Blockchain platform Onchain Lens reported that the Aave V3 entity’s highly leveraged position came under intense pressure as prices fell, forcing a withdrawal of 199,720 ETH (approximately $632 million) to avoid a forced liquidation.
The whale then sent over 44,000 ETH to Binance to close the position. Estimated losses exceed $70 million, marking one of the largest risk aversion events this cycle.
Institutions absorb the supply
The other aspect of this redistribution is the emergence of institutional-level buyers who are building large ETH treasuries. They are not traders but accumulators.
BitMine, a digital asset treasury company chaired by market strategist Tom Lee, has expanded its holdings to 3.5 million ETH. This represents 2.9% of the total ETH supply, putting the company more than halfway to its goal of accumulating 5% of all ETH in circulation.
BitMine is not a hedge fund trading cycle but an ETH-denominated corporate treasury. Its stated goal is to accumulate and leverage its offering, thereby transforming a passive balance sheet asset into a long-term return-generating powerhouse.
As a result, the company has aggressively acquired its ETH holdings and is currently the largest public holder of the digital asset.
SharpLink, another growing ETH treasure, reflects this strategy. The company now holds 859,400 ETH (valued at $2.74 billion) and has earned over 7,067 ETH in staking rewards since mid-2025.
Together, BitMine and SharpLink now control over 4.35 million ETH. Their programmatic accumulation acts as a structural floor, permanently removing this supply from the volatile and liquid market and locking it into staking contracts.
However, this methodical institutional accumulation stands in stark contrast to a wave of retail-driven exits.
According to data from SoSo Value, spot Ethereum ETFs are on track for their largest monthly outflow on record, with more than $1.2 billion withdrawn this month.
This contraction has resulted in a mixed and disordered liquidity landscape.
ETF investors, who are often more price responsive, sell out of fear. Leveraged traders are being forcibly liquidated. Simultaneously, long-term holders realize profits over multiple cycles, providing the very supply that new institutional treasuries programmatically absorb for long-term use.
This interaction is why the recent correction appears chaotic, even though the underlying mechanisms of transferring from weak, reactive hands to strong, programmatic hands remain consistent with previous cycle resets.
The supercycle thesis
Lee, executive chairman of BitMine, says the turmoil is a necessary phase of an emerging ETH “supercycle.” Lee draws a direct parallel to Bitcoin, which he first recommended to Fundstrat clients in 2017 at a price of around $1,000.
“We believe ETH is entering the same supercycle,” Lee said. “To profit from the 100-fold increase in Bitcoin, you had to endure existential moments. (So current cryptocurrency prices) while simply discounting a massive future.”
This “massive future,” according to the institutional thesis, is Ethereum’s established role as the primary colonization layer of the global economy.
The optimistic case for companies like BitMine and SharpLink is simple: Ethereum is the only chain that every major crypto-economy actually resides on.
The entire ecosystems of stablecoins, layer 2 (L2) scaling solutions, perpetual derivatives, real-world assets (RWA), and institutional custody streams are all reconnecting and creating demand for ETH.
Lee views sharp retracements not as structural failures, but as characteristic of an asset moving from pure speculation to macro relevance.
Taken together, the data reveals a market undergoing large-scale post-merger restructuring. This is not a simple withdrawal. This is a redistribution event in which supply migrates from short-term reactive hands to long-term structurally committed hands.
