Ethereum: Why are the oldest whales selling Everything?

OG Whales Exit Ethereum

According to Arkham Intelligence, a dormant address that has been inactive for over a decade has moved 2,000 ETH — a position acquired at $0.31 during the very early days of the blockchain. At the current price, this initial investment of $620 has transformed into a value of $4.2 million, representing a return of over 6,700x over ten years.

This type of movement generates two mechanical interpretations within the community. The first: a maximum conviction holder liquidates, signaling a peak or a loss of faith in the asset. The second: a rational investor secures a portion of extraordinary gains after a decade, a normal behavior that says nothing about the long-term thesis.

What makes this movement more troubling than mere profit-taking is its context with the chart. ETH/BTC has just closed 13 consecutive red candles on the 3-day timeframe — an unprecedented black streak in the history of the ratio. Ethereum is underperforming against Bitcoin across a number of market phases that now exceed simple cyclical rotation. According to CoinGlass, Q2 2026 shows -0.13% for ETH compared to +13% for BTC, and Ethereum’s Q1 drawdowns were 1.5 times deeper than those of Bitcoin.

Moreover, Ethereum has been in a range for over 5 years and has only offered a gain of 100% for those who bought the perfect bottom in 2022 at $1,085. The majority of investors who purchased Ethereum over the last 6 years are at a loss. The tension is palpable, and even the whales with strong conviction are feeling the strain.

In this specific context, the whale’s movement resembles what traders call a “sell-the-top” — an exit from dormant hands during a moment of relative strength — rather than a simple routine profit-taking.

David Hoffman: A New Example of This Exodus

The case of Hoffman is another indicator. This is not an anonymous speculator announcing the sale of his position. It is the man who co-founded Bankless, the media outlet that may have done more than any other to popularize Ethereum and the thesis “ETH is money” among millions of retail and institutional investors worldwide. His decision to sell all of his ETH represents a significant symbolic and analytical break.

Hoffman’s thesis, developed in his post-sale article, is rigorous and deserves careful reading. He does not predict the failure of Ethereum as a network. He predicts the failure of ETH as a re-rating asset.

“The ETH is money thesis has not failed… it has played out. Ethereum has received the ETH price it deserves, and I do not see ETH being re-evaluated upwards or downwards.”

This detail is fundamental. Hoffman remains “massively bullish on Ethereum” as a network — he anticipates excellent performance from the infrastructure — but believes that “only a marginal share of this success will be reflected in ETH.” In essence, this is equivalent to saying that the ETH token is not really correlated with the development of the Ethereum blockchain and is no longer viable as an investment.

For example, in 2026, NEAR is experiencing a re-rating precisely because NEAR Intents generate real revenue and increasing token burns. ETH, on the other hand, has ceded an increasing share of its revenue to its own L2s — which capture value without redistributing it to the native token.

Staking and Proof-of-Stake as the Last Argument

Before concluding and announcing the death of Ethereum, the data from staking imposes a nuance. According to ValidatorQueue, only 64 ETH are waiting to be unstaked, compared to 3,394,545 ETH queued to be staked. This imbalance of 53,000x between entry demand and exit pressure is structurally bullish for the circulating supply.

This dynamic says something important: large institutional holders and validators are not fleeing Ethereum. They are locking it up for yield. Hoffman’s decision and the whale’s movement thus occur in a market where the long-term conviction base remains intact for the majority of participants, even as historically central voices begin to recalibrate their exposure.

The distinction between distribution and rotation is crucial here. A massive distribution would simultaneously see an exit from stakers, an increase in flows to exchanges, and sustained selling pressure. This is not what the data shows today. What the data currently indicates is a growing divergence between the health of the Ethereum network and the relative performance of ETH as an asset, which is disappointing.

Hoffman identifies in his analysis what may be Ethereum’s most profound problem in 2026: the L2 model has succeeded in scaling the network but has simultaneously fragmented value capture to the detriment of the native token. Every transaction on Arbitrum, Base, or zkSync secures Ethereum but generates revenue that accumulates in the L2 ecosystem, not for the future of ETH.

Sources:

• AmbCrypto
• Tradingview
• David Hoffman
• ValidatorQueue.com
• Arkham

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