The cryptocurrency market has experienced a dramatic sell-off in the past 24 hours, with Bitcoin (BTC) and Ethereum (ETH) witnessing significant drops of over 20% in value. This turmoil centers around Justin Sun, the founder of the TRON blockchain. On-chain data suggests Sun may have taken advantage of the downturn to purchase millions of dollars’ worth of Ethereum at lower prices.
The market meltdown saw a staggering $600 billion wiped out, as reported by Fortune. The upheaval coincided with a wave of stock market sell-offs, triggered by a disappointing jobs report and what some perceive as inaction by the Federal Reserve. This market volatility occurred despite positive developments within the crypto sector, such as the introduction of Ethereum ETFs in the US in July. The total crypto market capitalization plummeted from over $2.5 trillion on July 28 to approximately $1.9 trillion on Monday, marking the most substantial decline since 2022.
Wintermute, a crypto market maker, described the plunge as “unexpected” and attributed it largely to the US jobs report. The firm highlighted liquidations totaling over $1 billion in digital asset positions overnight, alongside a $57 billion decrease in altcoin market capitalization. Notably, Jump Trading, a prominent Chicago-based trading firm, also engaged in a significant sell-off, moving $47 million worth of Ethereum to centralized exchanges. However, Wintermute cautioned against attributing the market downturn solely to Jump’s actions.
In the midst of this market chaos, Justin Sun drew attention for reportedly purchasing 16,236 ETH using 37 million USDT stablecoin, capitalizing on Ethereum’s crash to $2,112 on Monday, with an average purchase price of $2,279. The address linked to this transaction was created mere hours prior, withdrawing 38 million USDT from the HTX exchange before acquiring the ETH tokens. This address is believed to belong to Sun due to its similarity to his previous transactions.
Sun reportedly holds over 700,000 ETH, facing a substantial paper loss of around $280 million as Ethereum’s value dropped by 20%. Since February 8, 2024, Sun has allegedly accumulated 377,590 ETH across three wallets, with an estimated total cost of $1.15 billion. Despite Ethereum trading below his average buying price of $3,051, Sun has denied rumors of liquidation. In a social media post, he stated:
“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 entrepreneurs, such as staking, running nodes, working on projects, and helping project teams provide liquidity.”
At the time of writing, Ethereum has managed to recover to the $2,460 level, with a 346% increase in trading volume over the past 24 hours, amounting to $76 billion, as reported by CoinGecko.
