Cathie Wood reveals strategy to outsmart Wall Street originally appeared on TheStreet.
Ark Invest CEO Cathie Wood is bagging Ethereum treasury companies, days after she dumped Robinhood and Coinbase stocks.
In a tweet on July 26, Wood responded to the sudden demand to unstake Ethereum, asked by Brett Winton, chief futurist at Ark Invest.
According to an analysis by Galaxy, Ethereum saw a massive spike in “unstaking” activity beginning July 16. In just six days, the number of validators trying to exit the Ethereum network’s staking system rose from about 1,920 to over 475,000. That’s a 24,000% increase — and it caused the average wait time for a validator to unstake their assets to stretch from under an hour to more than eight days.
Galaxy believes this wasn’t just because of Ethereum’s recent price rally or changes from the latest “Pectra” upgrade — it was largely triggered by a sharp rise in ETH borrow rates, which made popular yield strategies suddenly unprofitable.
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To make sense of this, it helps to understand a few basics. Ethereum uses a system called proof-of-stake, where users known as validators lock up ETH in order to help run the network and earn rewards. This process is called staking. When they want to pull their ETH out — known as unstaking — they enter an exit queue. A validator can only exit once it’s approved by the network, which ensures stability. But when everyone rushes to exit at the same time, that queue gets long — just like a crowded bank withdrawal line.
What Galaxy found is that a rise in ETH borrowing costs pushed investors to unwind “looping” strategies (like staking, borrowing ETH against it, and staking again), which made many of them quickly pull out — creating a bottleneck and putting stress on liquid staking tokens like Lido’s stETH and others, which are supposed to stay pegged to ETH but briefly slipped below value during the chaos.
