Is the DAT dumping trend putting sell pressure on ETH? From ETHZilla to FG Nexus, has Vitalik's concern come true?

As the narrative hype surrounding the encryption reserve company (DAT) cools down, following ETHZilla's dumping of 40 million USD worth of ETH last month, FG Nexus also sold over 32 million USD worth of ETH this week for stock buybacks, exacerbating market concerns about the sustainability of the DAT model. There are worries that this trend, which was originally intended to boost the long-term value of ETH, may instead become a source of short-term selling pressure.

From belief to dumping: FG Nexus sold 10,900 ETH to buy back stocks.

The publicly listed company FG Nexus (, formerly Fundamental Global, with stock code: FGNX), reported to the SEC in August a maximum fundraising amount of $5 billion, claiming to become the “largest ETH holder in the world.”

However, the latest financial report reveals that the company sold 10,922 ETH ( for about 32 million USD ) to accelerate its stock repurchase plan, causing the stock price to drop 7% in a single day, down 93.7% from the August peak.

The stock price of FG Nexus is similar to most DAT, reaching a peak as soon as the news was announced.

As of now, FG Nexus holds about 40,000 ETH, worth approximately 120 million dollars. The original grand goal seems to have been replaced by BitMine, which currently holds 3.56 million ETH, worth over 10 billion dollars.

Is a selling wave emerging? ETHZilla has just reduced its position in ETH.

FG Nexus is not the first DAT to reduce its ETH holdings. Last month, ETHZilla ( stock code: ETHZ) also sold about 40 million dollars worth of Ethereum to buy back shares, sparking market discussions.

Even though Bitwise's Chief Investment Officer Matt Hougan has stated that the risks of DAT stem from long-term diversified debt leverage, leaning more towards chronic risks rather than an overall collapse, the continuous dumping waves have inevitably deepened the market's skepticism about the structural sustainability of DAT.

(DAT is a key driver of the price drop? Encryption professor: Excessive fundraising and reckless token circulation will ruin the project ).

Narrative of premature decline: Will DAT be too busy protecting the market and buying coins?

DeFiLlama data shows that since September, the mNAV of most DAT has already been below 1, indicating that the market's confidence in this narrative has waned and the hype has peaked. Various DAT have adopted new self-rescue methods, from issuing preferred stocks, repurchasing shares, to offering warrants with stock purchases and reverse stock splits, which have also become one of the highlights.

(DAT Survival skills revealed, the encryption meme stock is full of creativity, can it successfully save the stock price? )

When the DAT stock price continues to be sluggish and the premium advantage no longer exists, the debt risk also rises accordingly. If the outcome leads to selling coins, it will severely undermine the narrative support for ETH, which is probably what Ethereum co-founder Vitalik Buterin fears the most: “The excessive leverage built on ETH may harm Ethereum.”

(Vitalik looks at Ethereum's reserve company: it's good to let more people own ETH, but don't play leverage games )

The “mini Ponzi” of this bull market is collapsing, leading to the survival of the fittest.

As the encryption KOL DonAlt said: “The Ponzi scheme of this round is starting to collapse.” The short-term weakness in coin prices has forced ETHZilla and FG Nexus to reduce their holdings, further shaking the trust in the DAT narrative, turning positives into negatives.

It is not difficult to see that DATs will ultimately move towards consolidation, eliminating the weak and retaining the strong. Only those with healthy leverage and capital structure will survive. Before that, whether ETH believers can withstand this wave of selling pressure becomes a key issue.

Is the DAT dumping wave creating selling pressure on ETH? From ETHZilla to FG Nexus, have Vitalik's concerns come true? First appeared on Chain News ABMedia.