As reported by Wu Blockchain, an ongoing Asian Ethereum DAT project has been canceled after a bearish price trajectory.
Ethereum DAT Project, Leading Asian Whale, Has Been Shut Down
Last month, Bloomberg reported that some influential investors in Asia were preparing to launch an Ethereum trust. The group included Li Lin, founder of Huobi cryptocurrency exchange, Shen Bo, co-founder of Fenbushi Capital, and Xiao Feng, chairman and CEO of HashKey Group.
At the time, investors were in talks to acquire the Nasdaq-listed company to facilitate a digital asset treasury (DAT) structure, and the project had already boasted $1 billion in backing.
However, according to a report from Wu Blockchain, the project has now been cancelled. “A $1 billion Ethereum DAT proposed by leading Asian cryptocurrency investors has been shelved and the promised capital has been returned,” Wu Blockchain wrote.
Of the $1 billion in support, $200 million came from investment firm Avenir Capital, where Huobi's Li is chairman. Asian institutional investors such as HongShan Capital Group provided an additional $500 million.
DAT companies, popularized by Michael Saylor's strategy (formerly MicroStrategy), are public institutions whose primary business is digital assets. Previously, companies were primarily focused on using Bitcoin for these types of strategies, but 2025 will see a push towards altcoins like Ethereum and Solana.
BitMine, currently the largest ETH DAT and the second largest after Strategy, adopted an ETH reserve strategy in June this year. According to a Monday press release, the company holds 3,559,879 tokens purchased for a total of $11.1 billion.
Unlike BitMine, the Asian-led DAT project appears to have been halted before launch. “According to sources, the plan was halted due to the market downturn following the sharp sell-off on October 11,” Wu Blockchain said.
Ethereum has been in free fall along with the broader cryptocurrency sector since this crash, with its price down more than 38% from its October peak. As a result, BitMine's holdings were underwater. Based on current exchange rates, the value of its holdings is $10.3 billion, about 7% below its cost basis.
As CryptoQuant community analyst Maartunn points out in his X post, the average cost basis (“realized price”) across the ETH network is $2,316.
The trend in the ETH Realized Price over the last few years | Source: @JA_Maartun on X
Given this, the average investor is still making around 24%. Previously, when Ethereum hit record highs, profitability reached extreme levels. So, compared to that, there is some cooldown time. “Momentum is cooling down as the market takes a breather,” Maartunn said.
ETH price
Ethereum fell another 5% in the past day, sending its price soaring to $2,880.
ETH has been facing bearish momentum in recent days | Source: ETHUSDT on TradingView
Dall-E, featured image from CryptoQuant.com, chart from TradingView.com
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