Article by Gemini, DeepChain TechFlow
On September 20, BitMEX co-founder Arthur Hayes publicly called for a trade, setting a target price of $0.50 for Ethena’s governance token, $ENA.
After the statement was made, buying pressure quickly emerged in the secondary market, causing the ENA spot price to surge rapidly from around $0.17 to surpass $0.21, with intraday gains一度 exceeding 24%.
But before retail investors chase prices blindly, they should first take a look at the positions and costs of large investors.
According to on-chain analytics firm Arkham, Arthur Hayes completed his left-side accumulation a month ago. His associated wallet accumulated 25.33 million $ENA at an average price of approximately $0.09, totaling around $5.53 million. At current market prices, this position has an unrealized profit of $3.28 million, representing a paper return of over 146%.
(Annotation: Arkham on-chain tracking shows that Arthur Hayes's address holds 25.33 million $ENA at an average price of approximately $0.09, with unrealized profits exceeding $3.28 million)
When a major player doubles their unrealized profits and publicly goes bullish on social media, it’s widely regarded as an extremely dangerous signal in the crypto market. Many sharp on-chain observers see this as more likely a sign of dumping. Some community users point out that when a hedge fund manager holding tens of millions of low-cost tokens begins promoting unrealistic long-term profit expectations to retail investors, it often means they’re seeking liquidity to exit their massive unrealized gains.
Shortly after Arthur called the trade, ENA began to decline, further reinforcing the belief that this was evidence of a big player dumping after a pump.
However, if you reduce this movement to nothing more than a simple case of “high-level pumping to find suckers to take the other side,” you’ll miss the narrative shifts occurring with Ethena or other similar “old-man coins.”
This round of speculative capital targeting legacy coins has favored assets with actual revenue, favorable changes in token distribution, and some fundamental backing—ENA is a typical example among them.
Arthur Hayes's precise market timing and high-profile statements coincided precisely with Ethena's most aggressive tokenomic shift since its inception. On one side, a fundamental transformation from a governance shell to a cash-flow-generating asset; on the other, structural risks stemming from unexhausted early-position holdings.
In this battle between bulls and bears, the logic behind buying orders and the calculations behind cashing out are fiercely clashing on the same asset—and this is what we should dig deeper into beyond just trade signals.
The foundation bought out early stakes, but selling pressure remained unresolved before October.
For a long time, the core pain point suppressing the valuation of the ENA token has not been the protocol's business scale, but rather the large-scale unlocks that occur reliably each month, effectively becoming an open secret driving price downward.
For a synthetic asset protocol managing billions of dollars in assets, monthly unlocks act like a pump hanging over the secondary market. Any valuation premium driven by business growth is gradually eroded by persistent expectations of inflationary dilution.
This deadlock saw a shift at the end of August.
The announcement previously released by the Ethena Foundation stated that the official team utilized ecosystem reserves to buy out the locked seed-round early investor allocations via over-the-counter transactions. For early investors whose original allocations exceeded 0.25% of the total supply, the foundation implemented targeted identification and negotiated buyouts; any remaining locked allocations that did not reach a buyout agreement were required to be fully released by October 5, after which no further long-term monthly vesting schedule will be maintained.
(Note: On-chain analysis by community researcher @0xsubwizard on Ethena Foundation's OTC buyout of early stakes and tokenomics adjustments)
While this action theoretically ends the prolonged bleeding over multi-year cycles, the flip side is the extreme front-loading of risk.
Unsold early-stage tokens are set to be released before October 5, meaning the secondary market must withstand a sharp pulse of token selling pressure in the short term. In other words, the so-called supply vacuum won’t materialize until mid-October or later. Before this large unlock occurs in early October, any aggressive price surge disconnected from actual buying demand is likely to become a golden window for early investors and large holders to exit at peak prices.
95% of net income used for buybacks; the buyback narrative is a funding炒作 point
Beyond changes in the chip structure, what truly fuels the bulls' fantasy of valuation reevaluation is the unlocking of value capture channels.
In previous DeFi narratives, the vast majority of protocols were trapped in a disconnect between booming business metrics and stagnant token prices. Ethena’s synthetic dollar, USDe, and USDtb, which invests in traditional U.S. Treasuries, have rapidly scaled by leveraging highly competitive basis arbitrage and treasury yields, securing a $1 billion funding support from FalconX and integration with BlackRock’s Aladdin system.
However, despite the protocol frontend generating substantial revenue, ENA token holders receive no economic benefit, and the token's functionality remains long-term limited to "empty governance" without actual dividend rights.
The mechanism to change this situation is the recent governance proposal by Ethena to allocate 95% of the protocol's net income toward repurchasing ENA on the secondary market.
This scheme creates an on-chain value feedback loop: users minting USDe and USDtb drive growth in the protocol’s assets under management; Ethena hedges the resulting short basis profit on derivatives exchanges, combined with yield from reserve assets, generating net protocol profits; the smart contract captures 95% of this net cash flow to execute scheduled buybacks on the secondary market, transferring acquired tokens to the treasury or burning them.
After the full mechanism is operational, ENA’s pricing logic shifts away from pure sentiment multiples toward discounted protocol cash flows. The governance proposal passed with overwhelming support of 14.1 million votes in favor and 0 votes against, far exceeding the 5 million vote quorum, indicating that large holders and market-making capital have aligned their interests with the activation of the Fee Switch.
But this seemingly perfect cash flow machine has an extremely fragile drive shaft at its core: the contract funding rate.
The core pillars of Ethena's underlying income are bullish sentiment in the derivatives market and positive basis. Once the broader crypto market enters a prolonged bear phase and perpetual contract funding rates remain persistently negative, the protocol not only loses its high basis income but may also need to draw from reserves to subsidize short hedging positions. When underlying income shrinks, the repurchase amount representing 95% of net income will plummet sharply, causing the cash flow flywheel to reverse and lose momentum.
Therefore, the lifeline of the protocol's survival lies in the overall cryptocurrency market. Under the current stable market conditions, there is still some room to tell this story of real income.
Be cautious of signals claiming 0.5; don't take them at face value.
From an investment research perspective, Arthur Hayes’s $0.5 target price is essentially a sophisticated form of expectation management.
The author’s core assessment is that Arthur Hayes’s massive position built at $0.09 grants him nearly absolute control. The price range from $0.21 to $0.50 represents a wealth-creation vision painted for retail investors, but this does not prevent him from dumping liquidity onto buyers at any stage along the way to his target price.
For a whale with a paper profit of 146%, exiting during peak market sentiment is a standard hedge fund strategy. We welcome the hype he generates, but users should carefully manage their own copy-trading timing.
For savvy players, the most important thing is to monitor his address (click here) to see if it aligns with his public actions, providing insight for your own investment timing.
But setting aside personal biases and筹码博弈, ENA's asset characteristics are indeed shifting compared to other older listed tokens. The 95% net income buyback of ENA tokens supports a compelling narrative around real revenue. We recommend closely monitoring its price movement ahead of the upcoming concentrated token unlock on October 5.
After all, the trading volume and absorption of selling pressure from large holders will provide the most objective answer.