The second-largest cryptocurrency by market capitalization, Ethereum, has lately been the subject of some heavy market movements because of—well, it’s not quite clear what yet.
On March 27, hackers executed a series of coordinated moves, dumping large amounts of Ethereum onto the market. This has, understandably, raised some concerns about volatility and security within the Ethereum ecosystem. Not to mention, those hackers probably shouldn’t be doing what they’re doing. This has all been happening alongside a severe downturn in Ethereum-related exchange-traded funds (ETFs). Not fun times for investors in the digital asset world.
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The Hack: Large ETH Dump and the Impact on the Market
As per the latest reports, a fresh wallet has obtained 3,433 ETH from the THORChain decentralized liquidity network. It then promptly sold the same for 6.8 million DAI, putting the price per ETH at $1,981 during the time of the sale. This transaction, albeit a large one, was just an appetizer. Two other wallets, possibly linked to the same group of intruders, were served the main course—a total of 14,064 ETH obtained from THORChain and the Chainflip decentralized exchange. These wallets then flipped their Ethereum for 27.5 million DAI at an average price of around $1,956 per ETH.
Hackers are dumping $ETH!
2 new wallets(likely related to hackers) received 14,064 $ETH from #THORChain and #Chainflip, then dumped for 27.5M $DAI at an average selling price of $1,956.https://t.co/hSP1PRGpuLhttps://t.co/6axvL6d7Dg pic.twitter.com/7RoYCGMdWD
— Lookonchain (@lookonchain) March 28, 2025
The dump of ETH is very concerning, and the amount involved — more than 17,000 ETH — is a substantial portion of what’s available on the market. The pressure this forced onto Ethereum opened a window for speculators to take the price down. And for a token that has been struggling to find legs lately, the market did not need any help from the outside to lower it further. Meanwhile, the hackers behind the hack have plenty of other avenues to explore with their DAI. They could convert it to another asset, still using a pseudo-anonymous method through mixers and other tools. Or, they could find a way to put it to work, which is honestly something we should all be holding our breath for.
Ethereum ETFs See Outflows Amid the Market Disturbance
Following the ETH dump, there has been a direct impact on Ethereum-related financial products. On March 27, Ethereum-focused exchange-traded funds (ETFs) had a total net outflow of $4.22 million. Notably, none of the nine Ethereum ETFs that we tracked during this timeframe were able to muster any net inflows. This fact, coupled with the total outflow, indicates a pronounced turn in investor sentiment toward these Ethereum products.
On March 27, U.S. spot Bitcoin ETFs recorded a total net inflow of $89.06 million, marking the tenth consecutive day of net inflows. Spot Ethereum ETFs saw a total net outflow of $4.22 million, with none of the nine ETFs recording any net inflow.https://t.co/Hj2Gs49bWa
— Wu Blockchain (@WuBlockchain) March 28, 2025
This is a big step for Ethereum. For ETF, see “Ethereum ETF.” An Ethereum ETF would allow institutional investors to invest in the Ethereum blockchain and Ether, the cryptocurrency that blockchain “powers,” without holding Ethereum directly. This is a great way for institutional investors to get exposure without holding the underlying asset. The problem is that it makes Ethereum a far less stable investment in the long run. And this is quite clearly because there are security issues with Ethereum.
Broader Implications for Ethereum and the Crypto Market
Hacker actions and Ethereum ETF liquidations: a warning to the crypto universe.
Ethereum ETFs have been selling ETH in big quantity—Ethereum ETF liquidations have been a problem recently. Hackers, meanwhile, haven’t been sitting idle. They’ve also been selling off a big pile of ETH. The outflows (and the ETH price drop that has accompanied them) are ostensibly related to the pens we’ve been putting together for the Ethereum ETF that we expect to be and to make big waves in the near future.
But informal reports from various factions over inside the Ethereum network also suggest that those network vulnerabilities are currently being more than usually exploited. And when you put all this together—Ethereum ETF liquidations, the selling off by hackers, and the fact that those hackers are allegedly exploiting network vulnerabilities—you realize that there’s a fair bit of Ethereum that’s been dumped, for several different reasons, into a not very accommodating price environment.
Apart from the direct selling pressure on Ethereum, the actions of these hackers could have consequences for how Ethereum is viewed in the long term. When something is described as ‘risky and unpredictable,’ people tend to hold back from embracing it, and the much-told tale of crypto-risks seems like a narrative under which potential new investors might be dissuaded from engaging with Ethereum or institutional players from getting involved in crypto whatsoever. And that kind of dissuasion is not helpful for Ethereum’s adoption as a global asset.
The drop-off in Ethereum ETF inflows could show that traditional investors are even more hesitant to get into the crypto space, especially after recent security issues. They (ETFs) have been seen as a vehicle for exposure that’s safer, if not exceedingly so, and that’s certainly a factor in the kind of regulated environment these ETFs provide. But if fewer institutional investors want in and if they’re even pulling back from this vehicle as a way to get into the crypto market, then that’s, I think, a credible sign for a broader pullback.
What’s Next for Ethereum?
Questions about the cryptocurrency’s future keep surfacing when hackers offload Ethereum onto the open market and when institutional investors shy away from Ethereum ETFs. But despite these recent disturbances, not just to the price but to the very security of the Ethereum network, the fundamentals of the Ethereum market, I believe, remain strong: Ethereum is more scalable than ever; it is more useful than ever as a decentralized finance platform; and as for price volatility, well, that is a hallmark of all cryptocurrencies.
To restore Ethereum’s recent sell-off and rebound back to where it was, not so long ago, the digital currency must reassert its security—even more so given the recent high-profile hack of a major Ethereum-based service. That security must be reinforced against the sorts of attacks that brought down the Ethereum service on July 20.
Ethereum could be more volatile in the short term. This is particularly true if the hackers behind the recent sell-offs are forced to liquidate even more of their holdings. But sell-offs caused by hackers don’t reflect on the long-term health of a cryptocurrency—only its short-term price action. And Ethereum’s price isn’t the only thing that has been moving when it comes to this altcoin—some very significant developments have been occurring. So let’s get into those.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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