Original 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 in about $8.01 million. This is no small matter - this wallet previously spent $210 million to hoard 67,498 ETH at an average price of $3,259, and now has a paper loss of up to $125 million. As a star DeFi project endorsed by the Trump family, WLFIs move is puzzling: Why cut meat at this juncture? How much ETH can be sold? Will it continue to sell in the future?
Difficult decisions in the cold market
At present, the crypto market seems to be shrouded in cold air, and the price of ETH is shivering between $1,465 and $1,503, which is more than half of WLFIs purchase price. Looking back at the beginning of 2025, the optimism brought by Trumps inauguration had caused WLFI to increase its holdings of ETH in a big way, as if it was going to take advantage of the policy to soar into the sky. Unfortunately, the good times did not last long. The continued downturn of ETH turned this pride 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 the sell-off is intriguing. On the same day, a whale bought 4,677 ETH at $1,481, and the market was in full swing. WLFI chose to sell at this time, perhaps because it smelled the bottom of the short term, or perhaps because it 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 - reluctant, but there is no way.
Why sell: stop loss or other plans?
Why did WLFI sell at this point? There may be more than one answer.
First of all, the logic of stop loss is obvious. ETH has dropped by $1,794 per coin. Although the loss of selling 5,471 coins is nearly 10 million, it is better than watching the remaining 62,027 coins continue to depreciate. Its like cutting off a rotten tail stock in the stock market and saving 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 bear it?
Secondly, the pressure of cash flow cannot be ignored. WLFI has been prosperous for a while with the sale of 590 million tokens, but the expenses for operation, cooperation and new projects will not stop. Although 8.01 million is not much, it can solve the urgent need when the market is low. Think about it, a project backed by the Trump family cant let the wallet be empty, right?
Furthermore, this may be a test of a strategic turn. WLFIs asset pool contains not only ETH, but also veterans such as WBTC and TRX and newcomers in the RWA field. Reducing ETH holdings and freeing up funds to invest in partners such as Ondo Finance, or betting on the potential of Layer 2, is a way to prepare for a rainy day. After all, the DeFi stage is big enough, and ETH is just one of the roles.
Finally, dont forget the outside perspective. As the son of the Trump family, WLFI has a halo on his head, but also carries controversy. The white paper states that 75% of the profits go to the family, but the risks are passed on to the token holders. This model has long been suspicious. Could this sell-off be due to pressure from investors to prove that they are not just relying on the celebrity effect to make a living? It is unlikely, but it is not unreasonable.
Overall, stop loss and liquidity are the most direct drivers, and strategic adjustment is a potential foreshadowing. As for external pressure, it may just be the background music of this drama.
How much more can it be sold: trump card and bottom line
After selling 5,471 ETH, WLFI still has 62,027 ETH in its hands, which is worth about 90.9 million at the current price. How much more can this trump card be pulled out?
From the perspective of funding needs, if each sale targets a cash flow of about 8 million, then selling 5,000 or so coins would be enough, leaving a safety line of 56 million. But if there is a bigger funding hole, such as the launch of a new project or the maturity of debt, it is not impossible to sell 10,000 or 20,000 coins. However, in this case, the core status of ETH will be questioned.
Whether the market can handle it is also key. The 8.01 million sell-off did not cause much commotion, and the 5 billion daily trading volume of ETH seems to be digestible. But if WLFI sells tens of millions of dollars of goods in one go, panic may make the price worse. For the sake of caution, selling in batches and on a small scale is more like their style.
What is more important is the strategic bottom line. ETH is regarded as a strategic reserve by WLFI. If the holdings fall below half (about 33.74 million), its image as the leader of DeFi may be shaken. Unless it is absolutely necessary, they should not easily play this card. In the short term, it is a reasonable guess to throw another 5,000 to 10,000 (about 7.3 million to 14.65 million), which can quench thirst without hurting the bones.
Will you continue to sell?
Will WLFI continue to reduce its holdings in the future? The answer lies in three clues.
First, look at the market. If ETH falls below $1,400 and the floating loss increases by another 10 or 20 million, the urge to sell may be irresistible. But if the price rebounds to $1,800 and the floating loss shrinks to 90 million, they may tighten their wallets and even buy back some of their confidence. At present, the support level of $1,450 and the resistance level of $1,600 are the wind vanes.
Second, internal calculations are also critical. If WLFI still wants to play a leading role in the DeFi circle, ETHs status cannot be lost too badly, and the sell-off may gradually slow down. But if they set their sights on other hot spots, such as RWA or emerging tokens, ETH may become a cash machine and the pace of reduction will accelerate.
Third, external disturbances. The Trump administration’s pro-crypto policy is WLFI’s amulet. If there are big moves in the second quarter and the market picks up, they may be able to sit on the Diaoyutai. But if the family is involved in political turmoil, or investors press for transparency, the pressure to cash out will be unavoidable.
In the short term (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 mid-term reduction may account for 30%-50% of the remaining holdings, that is, 27 million to 45 million. In the long run, unless ETH completely turns around, WLFI may slowly fade out of this position and move its chips to a new battlefield.
Changes in Ethereum’s fundamentals: Why are big investors turning pessimistic?
The fundamentals of Ethereum seem to be undergoing a quiet change in recent years, which may be an important reason why big investors have become pessimistic about the prospects of ETH. Glassnode data shows that the number of active addresses of Ethereum has almost stagnated in the past four years, always hovering at the same level, and has failed to grow significantly with the market boom. This is not an efficiency range of technical optimization, but more like the exhaustion of growth momentum, showing Ethereums fatigue in attracting new users and developers.
At the same time, the rise of Layer 2 (L2) solutions should have brought new vitality to Ethereum, but it unexpectedly weakened its value capture ability. L2 significantly reduced the mainnets gas fees by diverting transaction volume (gas fees fell by more than 70% in March 2025). Although this is user-friendly, the value originally returned to ETH holders through the EIP-1559 burning mechanism was intercepted by L2, further compressing Ethereums profit space. Some analysts pointed out that unless the mainnet can revive the demand for block space through means such as large-scale tokenization, Ethereums long-term competitiveness may be at risk.
Institutional views also reflect this concern. CoinShares pointed out in a report that frequent adjustments to the Ethereum protocol economy (such as the Dencun hard fork) have brought uncertainty, hindering institutional investors from building reliable valuation models, thereby weakening its appeal. In March 2025, Standard Chartered lowered Ethereums price target for 2025 to $4,000, citing its structural decline.
Jon Charbonneau, co-founder of crypto investment company DBA, also said that Ethereums issuance model under the proof-of-stake (PoS) mechanism has fundamental trade-offs, and adjustments are unlikely to resolve the core contradictions. On the X platform, some users even bluntly stated that Ethereum has basically remained unchanged since 2016, upgraded slowly and missed the window for rapid transformation, and has become a victim of its own success.
At the same time, the EigenLayer Stakedrop event also disappointed the market. The narrative that ETH holding income should be boosted by restaking was broken due to unfair distribution, further undermining the confidence of large investors. These signals point to a reality: Ethereums fundamentals are being eroded by internal and external factors, and the former growth engine has shown signs of fatigue. The pessimism of large investors may be an intuitive response to this trend.
summary
This sell-off not only reveals WLFIs struggle in the market cold snap, but also reflects Ethereums deeper predicament. The stagnation of active address growth, L2 diversion of value, and the pessimistic signals from institutions have cast a shadow on Ethereums fundamentals, and the confidence of large investors is being shaken. WLFIs next step, whether it continues to sell or shifts its strategy, will unfold in the dual game of market and policy.
For investors, chasing the halo is tempting, but they need to make calm judgments: Can Ethereums future be revived? Where will WLFIs gamble go? The answer may only be revealed by time.
