TL;DR
- Ethereum’s Recent Plunge and Liquidations: Ethereum (ETH) faced a sharp decline, dropping to $2,171 before stabilizing at $2,225 within 24 hours. Institutional investors, including Jump Trading, sold off their Ethereum holdings, contributing to the downward trend.
- The Unverified Liquidation Rumor and Sun’s Response: A crypto community member claimed that Justin Sun faced liquidation, sharing incomplete screenshots. Sun promptly refuted the rumors, emphasizing that his firm rarely engages in leveraged trading strategies.
- Justin Sun’s $1 Billion Fund and Community Scrutiny: Sun announced a $1 billion fund to combat fear (FUD) in the crypto space during volatile times. Community members scrutinized Sun’s use of the word “rarely” and sought further clarification.
The crypto market has been experiencing significant turbulence, and Ethereum (ETH) hasn’t been spared. Amid this downturn, rumors circulated that Justin Sun, founder of the layer-1 (L1) blockchain TRON and advisor to Huobi, faced liquidation on his substantial Ethereum positions.
The rumors about our positions being liquidated are false. We rarely engage in leveraged trading strategies because we believe such trades do not significantly benefit the industry. Instead, we prefer to engage in activities that provide greater support to the industry and…
— H.E. Justin Sun 孙宇晨 (@justinsuntron) August 5, 2024
However, Sun swiftly addressed the fear, uncertainty, and doubt (FUD) surrounding these claims, reaffirming his commitment to the crypto industry.
Ethereum’s Recent Plunge and Liquidations
News outlets recently reported that ETH faced a sharp decline, briefly dipping to $2,171 before stabilizing at $2,225, a 23% decrease within 24 hours. Coinglass data revealed total Ethereum liquidations of $357.73 million during this period, with long positions accounting for $305.26 million and short positions for $50.22 million.
Institutional investors, such as Jump Trading, have been selling off their Ethereum holdings. Jump Trading transferred large amounts of ETH to centralized exchanges (CEXs) right before the market downturn, contributing to the downward trend.
The Unverified Liquidation Rumor
During this market turmoil, a crypto community member claimed that Sun had been liquidated, sharing incomplete screenshots as evidence. This unverified report fueled FUD within the cryptocurrency community.
However, Sun promptly refuted the rumors. He clarified that his firm rarely engages in leveraged trading strategies, as such trades do not significantly benefit the industry.
Spot On Chain Supports Sun’s Assertion
Spot On Chain, an on-chain tracking platform, provided further clarity. Their data confirmed that while Sun faced substantial losses, he had not been liquidated. Since February 2024, Sun accumulated 377,590 ETH across three wallets, valued at approximately $1.15 billion.
Despite Ethereum’s current trading price is well below his average buying price, Sun’s wallet addresses still hold 1,554 ETH, worth around $3.55 million. Additionally, Sun owns considerable amounts of stETH, EETH, and wstETH.
Justin Sun’s $1 Billion Fund to Combat FUD
In response to the market volatility, Justin Sun announced the creation of a $1 billion fund aimed at combating fear (FUD) within the crypto space during turbulent times. Although detailed plans for the fund remain undisclosed, Sun highlighted the industry’s growth over the past year.
Community Scrutiny and Arthur Hayes’ Input
Despite Sun’s reassurances, the crypto community noted the word “rarely” in his initial post and sought further clarification. Many believe that his statement does not reveal the whole story.
Adding to the speculation, Arthur Hayes, former CEO and co-founder of BitMEX, posted on X that his sources in traditional finance indicated a significant player had suffered heavy losses.
In summary, Justin Sun’s resilient Ethereum holdings provide some relief to the crypto community amidst the ongoing market challenges. However, scrutiny remains, and the industry eagerly awaits further developments.
