Paradigm Capital Moves $8.4M of $LDO to Exchange Wallet, Intensifying Selling Pressure

In the last month, there has been intensifying selling pressure on $LDO, the native token of Lido DAO. Most of this pressure has come from large institutional holders

Last month has seen increasing selling pressure on $LDO, the native token of Lido DAO, with several large institutional holders engaging in sustained sell-offs, bringing attention to their actions.

Prominent investment firm Paradigm Capital has been involved in some transactions that have brought further attention to this ongoing trend. On-chain data from TokenInsight shows that Paradigm Capital has been transferring a large amount of $LDO to exchange-linked wallets.

The net effect of these concerted actions has been that $LDO has dropped 22% in value in just the last 30 days.

Paradigm Capital Moves $8.4 Million in $LDO to Exchange Wallet

Analysts at TokenInsight observed that just nine hours ago, Paradigm Capital transferred 10 million $LDO tokens—valued at approximately $8.41 million—to the wallet address 0xC4Db, which is known to be a front for a trading platform. This particular address has served as a funnel for several institutional wallets to route their LDO tokens to trading platforms.

The post mentions that given the final destination of the funds and the fact that this is the first use of the address today, it is more likely to be an exchange.

Interest in these transactions is piqued by Paradigm’s most recent transaction, as it hints at the firm potentially liquidating a fresh batch of its holdings. This wouldn’t be the first time Paradigm has seen gains from divesting a portion of its early investments. In 2020, Paradigm purchased 70 million $LDO tokens directly from Lido’s treasury at a considerable discount of just $0.76 per token. That clocks in a total investment of roughly $53.2 million.

In November of last year, the firm sold off 50 million of those tokens at an average price of $1.31, generating an estimated profit of $27.5 million. With yesterday’s transfer of 10 million tokens to an unknown wallet, it appears Paradigm might be preparing to sell off half of its 20 million LDO tokens remaining in reserve—potentially continuing the wave of institutional selling that has affected LDO’s price trajectory.

Exchange-Linked Wallet Activity Signals Broader Institutional Exit

Paradigm is not the only one. In the last month, a number of institutional wallets have moved a total of 48.48 million $LDO tokens—valued at about $45.6 million during the transfers—to various exchanges using the wallet 0xC4Db. Such concentrated movement into exchange addresses is generally interpreted as an intent to sell, rather than a repositioning of assets or a custodial move.

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Among the institutions involved in these transactions is Blocktagon, a well-known cryptocurrency hedge fund, which has been actively investing in promising projects. Recently, Blocktagon sold a portion of its LINK holdings, signaling a strategic adjustment in its portfolio.

As these institutions adjust their investment strategies and valuations, their actions are closely watched by the broader cryptocurrency market. These shifts in institutional activity can have a significant impact on market trends and liquidity.

Price Performance and Market Outlook

The fallout from this selling spree is already clear in LDO’s market performance. The token has shed 22% of its value over the past month, while many other assets in the decentralized finance (DeFi) sector have rallied. For a project that once stood at the very forefront of Ethereum staking infrastructure, this kind of downward momentum reflects awfully on liquidity, investor confidence, and perhaps long-term institutional commitment.

Lido’s role in the Ethereum ecosystem is still present, especially for a company that has poured so far in the liquid staking department. But what’s going on with Lido? Well, Paradigm has started to dump; and with that, the questions have started to arise again about Lido’s prospects, governance, and the trajectory it’s on as an Ethereum development shop.

In the next days and weeks, market participants will be watching wallet 0xC4Db to see what it does next. If Paradigm is indeed continuing to liquidate its last stake, or if other institutions do likewise, $LDO holders could be in for further downside.

Currently, retail investors and the wider DeFi community are coming to terms with the implications of this institutional reshuffling and are left wondering whether Lido DAO can get through this storm without any further selloffs.