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Fenbushi Capital, a blockchain-focused venture capital (VC) fund, appears to be cashing in after moving four tokens, including Aave (AAVE) and Compound (COMP), to Binance. The VC takes these tokens to an exchange, presumably to sell and lock in their profits or limit their losses when market participants expect higher prices.
Will Fenbushi Capital withdraw money? Sends AAVE, UNI, SNT and COMP tokens to Binance
Following a series of lower lows after crypto prices peaked, mainly in the first quarter of 2024, the consensus is that Bitcoin and Ethereum prices are poised for a rebound. If Bitcoin breaks above $70,000 and Ethereum rises above $3,000, shaking off recent weakness, they could lift other less liquid altcoins, including the ones Fenbushi decided to send to Binance.
By on-chain dataThe VC donated 146,537 UNI worth $1.12 million to Binance, over 10.1 million SNT worth $244,000, 10,681 COMP worth $510,000, and 11,616 AAVE worth $1.89 million. The VC secured over $1.20 million in profit assuming he sold all of these tokens at spot rates.
Of all these tokens, their holdings in AAVE earned them over $1.1 million in profit. However, at spot rates, their COMP shares are shown in red. COMP is the native governance token of Compound, a lending protocol.
Fenbushi received these tokens almost two years ago, in 2022, months after most of them reached record highs during the last DeFi and NFT-fueled bull market. As of writing, no Fenbushi statement explained the decision to move most of its DeFi tokens to an exchange.
The rise of DeFi and protocol building: a bad time to exit?
Whenever coins are moved to a centralized exchange, it can signal weakness and be perceived as bearish. However, given the current sentiment in the cryptocurrency market, Fenbushi raises eyebrows and may leisurely down the upward trend.
According to DeFiLlamathe total value locked (TVL) in DeFi protocols is over $88 billion. At spot rates, TVL is up more than 100% from 2022 lows of approximately $36 billion.
Of these, Aave, Uniswap, and Compound are some of the largest platforms. Aave manages over $12.7 billion in assets, while Uniswap controls over $4.8 billion in assets.
In addition to the explosive growth in overall DeFi TVL, these protocols are also actively developing. Uniswap, a decentralized exchange, plans to release v4 in the coming months, while Aave is actively attracting recent users. At the end of September, the loan application had received nearly $20 billion in user deposits, strengthening its position in DeFi.
Feature image from iStock, chart from TradingView