A sharp, double-digit correction of more than 35% since Oct. 6 has triggered a crisis of conviction, ripping through the speculative layers of the market and forcing a wave of liquidations.
However, the on-chain story is not a simple collapse. It is a large-scale rebalancing of who controls the ETH supply.
The data shows a classic deleveraging event colliding with a structural accumulation trend. This comes as long-term holders sell and leveraged traders are purged, resulting in a new class of institutional treasuries that are indifferent to the short-term panic, methodically absorbing ETH’s supply.
For the first time since early 2021, Ethereum’s older investor cohorts are distributing at scale.
This cohort represents some of the earliest and most profitable ETH investors. While their elevated spending does not signal panic, it rather reflects seasoned investors taking profits amid volatility.
This wallet had invested just $310 in the 2014 ICO to receive 1,000 ETH, making the current holding worth over $3.13 million, representing a 10,097-fold return.
Meanwhile, this “old money” profit-taking is compounded by the catastrophic unwinding of leveraged positions.
Adding to the noise, other prominent figures, such as Arthur Hayes, were also seen selling.
The most significant event, however, involved the “66,000 ETH borrowed whale.”
The whale subsequently sent more than 44,000 ETH to Binance to close the position. Estimated losses exceed $70 million, marking one of the largest single risk-off events of this cycle.
The other side of this redistribution is the emergence of institutional-grade buyers building large ETH treasuries. These are not traders but accumulators.
BitMine is not a hedge fund trading cycles but an ETH-denominated corporate treasury. Its stated goal is to accumulate and stake its supply, transforming a passive balance sheet asset into a long-term, yield-generating powerhouse.
As a result, the firm has aggressively acquired its ETH holdings and is currently the largest public holder of the digital asset.
Combined, 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, liquid market and locking it into staking contracts.
However, this methodical institutional accumulation contrasts sharply with a wave of retail-driven exits.
According to SoSo Value data, 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, disorderly liquidity landscape.
ETF investors, who are often more reactive to price, are selling into fear. Leveraged traders are being forcibly liquidated. Simultaneously, long-term holders are taking multi-cycle profits, providing the very supply that new institutional treasuries are programmatically absorbing for long-term use.
This interplay is why the recent correction feels chaotic, even as the underlying mechanics of transfer from weak, reactive hands to strong, programmatic ones remain consistent with prior cycle resets.
That “massive future,” according to the institutional thesis, is Ethereum’s established role as the primary settlement layer of the global economy.
The bullish case for firms like BitMine and SharpLink is simple: Ethereum is the only chain where every major crypto economy actually settles.
Lee views the sharp retracements not as structural failures, but as characteristic of an asset transitioning from pure speculation to macro relevance.
Taken together, the data reveal a market undergoing a large-scale, post-Merge restructuring. This is not a simple drawdown. It is a redistribution event where supply migrates from short-term, reactive hands to long-term, structurally committed ones.
