TL;DR
- The proposed Digital Asset Trust (DAT) for Ethereum, which had raised $1 billion, has been canceled.
- The project was led by Li Lin, founder of Huobi, and was backed by major Asian investors.
- The main reason behind the postponement was market volatility and the price drop following October 11.
Finally, the ambitious plan, driven by Asian investors, to launch a $1 billion Ethereum Digital Asset Trust (DAT) will not proceed. The capital allocated for this investment has been returned. Had this project prospered, it was destined to be one of the most powerful institutional vehicles for Ethereum accumulation, competing head-to-head with holdings from established funds such as BitMine and Grayscale.
The project was conceived as a corporate treasury vehicle, with the exclusive goal of accumulating and holding large amounts of ETH, a strategy similar to that employed by companies holding Bitcoin.
Huobi founder, Li Lin, spearheaded the effort, with the support of influential Ethereum backers in Asia, including Shen Bo of Fenbushi Capital and Xiao Feng of HashKey Group. The consortium had raised around $1 billion, including $200 million from Li Lin’s Avenir Capital and $500 million from other Asian institutions.
Volatility Frustrates Huobi Founder’s Ethereum DAT
Official details are not yet known, but sources close to the process, cited by Wu Blockchain, indicated that the main reason for halting the plan was the recent market downturn that followed the sharp sell-off on October 11.
The postponement underscores the sensitivity of large institutional vehicles to market volatility. This is the same factor that has put other players under pressure, such as SharpLink, the first publicly traded company to use ETH as its primary reserve asset.
SharpLink is currently facing $479 million in unrealized losses due to the price drop and recently transferred 5,442 ETH to Galaxy Digital, sparking speculation about a rebalancing to reduce its risk exposure.
Overall, ETH accumulation activity among DATs has slowed in November, reflecting a more cautious stance as the cryptocurrency market adjusts.
