The recent rise of the "Whale" narrative, who is the mysterious new Ethereum whale Abraxas Capital?

Original Article Title: "Who Is Ethereum's New Whale Abraxas Capital? Withdrawing Over 270,000 ETH in a Single Week, Tether's 'Mysterious' Big Customer"

Original Article Author: Nancy, PAnews

Lately, driven by both Bitcoin and Ethereum, the crypto market has seen a significant rebound, with heightened market activity and frequent whale movements. Among them, London-based asset management company Abraxas Capital has garnered attention in this round of rebound for its high-frequency on-chain operations and heavy Ethereum DeFi strategy.

Withdrawing Over 270,000 ETH in a Single Week, Heavily Investing in Ethereum LST Ecosystem

Recently, Abraxas Capital has been very active on-chain.

Abraxas Capital Open Address Asset Holding Overview

According to Arkham data, as of May 20, the total value of crypto assets held by Abraxas Capital's two relevant public addresses has exceeded $1.15 billion, with a cumulative profit of approximately $280 million.

From an asset structure perspective, in addition to over $190 million worth of Bitcoin, Abraxas Capital's investment portfolio is highly concentrated in the Ethereum liquidity staking token (LST) space, used for staking or as collateral in various DeFi protocols. Its main holdings include AwETH, wstETH, awstETH, and weETH, where the combined holdings of AwETH and wstETH have exceeded $700 million, representing the absolute majority of its overall assets. These assets combine on-chain staking rewards with secondary market liquidity, reflecting Abraxas Capital's pursuit of a balanced strategy between stable returns and flexible portfolio adjustments.

In terms of fund growth pace, since mid-February 2025, the institution's asset size has accelerated significantly, breaking the $1 billion mark at one point recently. In just the past week (May 13 to 20), its net asset growth has exceeded $130 million, with most of the increase coming from a significant addition to the AwSTETH (Aave v3 wstETH) position, with an additional investment of over $120 million.

In terms of fund flows, in the past 7 days, Abraxas Capital has cumulatively withdrawn nearly 270,000 ETH from a CEX (centralized exchange), averaging about 6 buy transactions per day, with a total value exceeding 6.9 billion US dollars. Based on their average buy price of $2573.8, compared to the current ETH market price of about $2500, this portion of their position is currently in a temporary unrealized loss of approximately $11 million.

Of note, Abraxas Capital has significantly reduced its Bitcoin holdings over the past month. On-chain data shows that in recent weeks, the institution has transferred a total of 2000 BTC to exchanges, totaling over $190 million. However, recently they have started to increase their holdings again, withdrawing around $85 million worth of Bitcoin from exchanges.

According to Arkham data, Abraxas Capital's ETH funds have primarily flowed into Ethereum DeFi protocols. In the past 7 days, Abraxas Capital has also transferred over 174,000 ETH to mainstream DeFi protocols such as Aave, Ether.fi, Compound, with an estimated total value of about $4.4 billion. Particularly, Aave serves as the primary use case for Abraxas Capital's ETH holdings, with their asset position on AAVE V3 currently exceeding $480 million.

From this perspective, Abraxas Capital is becoming one of the institutional players more active and heavily invested in the Ethereum ecosystem, strengthening asset liquidity and yield compounding through deep participation in the DeFi market.

With assets exceeding $30 billion, was once a Tether major client

Abraxas Capital Management is a London-based asset management company regulated by the UK Financial Conduct Authority (FCA) with the aim of building a top-tier asset management institution. The company was co-founded by Fabio Frontini and Luca Celati in 2002, both of whom previously held executive positions at London Dresdner Kleinwort Wasserstein (DRKW).

Abraxas Capital initially focused on the traditional finance sector, and on-chain data shows that as early as the end of 2014, the company had begun to establish Bitcoin assets. In 2017, Abraxas Capital publicly announced a shift in focus towards digital assets. Heka Funds is Abraxas Capital's core investment platform focusing on digital assets, headquartered in Malta, and regulated by the Malta Financial Services Authority (MFSA), with assets exceeding $30 billion.

As a multi-fund investment company, Heka currently manages three main funds: the Elysium Global Arbitrage Fund was launched in 2017 and was the EU's first officially licensed and operational digital asset fund, achieving a return of 214.95% since inception. By the end of 2024, its assets under management had exceeded 1.2 billion euros; the Alpha Bitcoin Fund was established in 2022, focusing on Bitcoin investments, with current AUM of 2 billion USD; and the Alpha Ethereum Fund was established in 2023, focusing on Ethereum, with current AUM of 4.8 million USD.

Among these, the Elysium Fund is the primary business of Heka Funds, initially entering the market with a Bitcoin arbitrage strategy inspired by a small arbitrage fund that had previously purchased Bitcoin at a low price on a Western exchange and resold it on a Japanese exchange. Initially, Elysium mainly conducted Bitcoin arbitrage, but as the arbitrage opportunities narrowed, the fund's strategy gradually shifted to stablecoin arbitrage.

In 2019, Fabio Frontini met with Tether's CFO, Giancarlo Devasini, for the first time and was invited to the Bahamas to meet with Tether's banking partner, Deltec Bank. According to Frontini's recollection, Deltec at the time showed him Tether's asset proof: over 60% of the reserves were in cash, with the rest in short-term U.S. Treasury bonds, giving him full confidence in Tether's 1:1 backing. Subsequently, Heka Funds verified Tether's liquidity through a series of small-scale test trades and gradually increased their trading volume.

Through continued trading and cooperation, Heka Funds has grown to become one of Tether's largest institutional clients and can be seen as a driver of Tether's rapid growth. According to a research report released by Protos in 2021, Heka Funds had obtained over $1.5 billion USDT at the time, accounting for approximately 1.5% of Tether's total issuance. In that year, Heka Funds accumulated about $52 million in profits, far exceeding the $5.8 million profit earned by the parent company Abraxas, making it one of the most successful funds within the group. In the past 30 days, according to Arkham data, among Tether's main trading counterparts, Heka Funds had a trading volume of $564 million, ranking eighth.

In an early 2025 interview with Protos, Frontini once again publicly expressed his confidence in Tether. He pointed out that Tether is earning significant carry income in the high-rate U.S. environment, and its business model is very simple yet extremely effective. He also referenced comments made by Howard Lutnick (Cantor Fitzgerald CEO) at the 2024 Davos Forum, stating that Tether's assets are primarily held by Cantor, the largest U.S. Treasury bond dealer, further bolstering his confidence in Tether.

Notably, earlier this month, on-chain analyst @DesoGames discovered through tracking the fund flow path of Tether during a certain period that it mainly flowed to the Abraxas and Cumberland crypto entities. However, the funds underwent complex and opaque routing through multiple accounts, a process that may aim to conceal the origins of illicit transactions. The analyst further revealed that HEKA Funds claimed to have a fund net asset value of 1.3 billion euros but purchased $1.5 billion worth of USDT (Tether issued around $2.5 billion during this period), an amount that significantly exceeds its financial capacity, raising suspicions. Additionally, HEKA Funds' shareholders and directors were found in an offshore leaked database, with complex backgrounds and difficult-to-trace true identities. HEKA Funds may simply be a shell fund used by Abraxas to mask its true activities, lacking transparency and credibility.

Currently, based on on-chain trends, with the ongoing financialization of the crypto market structure and the gradual narrowing of early stablecoin arbitrage opportunities, Abraxas Capital is also exploring expanding its strategy into a more sustainable Ethereum staking and lending ecosystem.

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