Hayes Blinks First: Why Arthur Hayes Bought Back ETH (and LDO, ETHFI, PENDLE) as Ether Smashed Through $4,000

Main points :

• Arthur Hayes reversed course: after selling $8.32M in ETH last week—and trimming ENA and PEPE—he moved $10.5M USDC and re-bought $5.29M in ETH, plus LDO ($0.56M), ETHFI ($0.52M), and PENDLE ($0.51M) as prices ripped higher.
  
• ETH broke $4,000 and tagged $4,200, its highest since 2021, on accelerating ETF inflows and corporate “ETH treasury” demand; spot ETH ETFs saw sharp net swings last week.
  
• Macro flipped the script: the Fed held rates July 30; a dovish tilt narrative grew after President Trump moved to nominate Stephen Miran to the Fed; July NFP badly missed (73k vs. ~110k est.).
  
• Policy catalysts: a new Executive Order seeks to open 401(k) access to crypto and other private assets—potentially enlarging the buyer base.
  
• Regulatory overhang eased: the SEC–Ripple case formally concluded (Ripple pays $125M; exchange sales not securities), boosting broader sentiment.
• Structural demand: Standard Chartered says ETH treasuries and U.S. spot ETH ETFs each bought ~1.6% of circulating supply since June; NAV multiples for treasury stocks have normalized.
  

1) What Happened: The Fastest “Never Mind” of 2025

Arthur Hayes—BitMEX co-founder and CIO of Maelstrom—sold into weakness barely a week ago, unloading 2,373 ETH (~$8.32M) and trimming ENA ($0.41M) as he warned Bitcoin could sag toward $100,000 and ETH to $3,000 on macro headwinds. Then the market rallied hard. On August 10, an address linked to Hayes pushed out $10.5M USDC and bought back 1,250 ETH (~$5.29M) plus 424,863 LDO ($0.52M), 92,000 PENDLE (~$0.51M)—basically “had to buy it all back,” as he joked on X.

[Insert Figure 1: Arthur Hayes’ August 10 buybacks (USD millions)]

This is a classic “position vs. thesis” moment: Hayes’ near-term macro thesis (tariffs + weak jobs + slow credit growth) pointed down; price action disagreed; he adjusted.

2) Price Action: ETH Breaks $4,000, Then $4,200

Ether cleared $4,000 on August 8 and printed $4,200 on August 9, its best level since 2021, as options dynamics and short liquidations kicked in. CoinDesk highlighted a derivatives “gamma pocket” up to $4,400 that could turbocharge moves if momentum persists.

[Insert Figure 2: ETH price progression, Aug 4–10, 2025 (USD)]

Even by August 10 evening U.S. time, ETH hovered around $4,233, maintaining altitude above the breakout.

3) Why the Reversal? Macro Winds Shifted in Crypto’s Favor

Hayes’ caution wasn’t baseless: tariff shocks can pressure growth; weak July NFP (73k; + job revisions −258k) stoked recession chatter; and credit growth worries linger. But in markets, the second-order effect often matters most: bad data → higher odds of dovish policy. The Fed held on July 30 (4.25–4.50%) and investors quickly pulled forward rate-cut bets into September after the weak jobs data.

Layer on Fed personnel headlines—President Trump’s plan to nominate Stephen Miran as a Federal Reserve governor—fueling a “dovish tilt” narrative (whether or not cuts actually arrive that fast). Risk assets, including crypto, like easier policy.

Simultaneously, the tariff volley continues (semiconductors, India, possible China escalation). Paradoxically, while tariffs can be risk-off, they’ve also steepened rate-cut odds by threatening growth, which can buoy crypto in the short run.

4) Policy Catalyst: A 401(k) Door Opens to Crypto

On August 7, President Trump signed an Executive Order aimed at expanding 401(k) access to private market assets—including cryptocurrency—alongside a separate order on “debanking.” Even if implementation takes time, this EO signals policy winds blowing in favor of allocating retirement flows into digital assets, a potentially large incremental buyer base. Major outlets (WSJ, Reuters, CBS) framed it as a meaningful—if controversial—shift that could raise fees and fiduciary complexity but broaden access.

For ETH specifically, any additional “traditional rails” access, especially tax-advantaged accounts, expands the addressable market beyond crypto-native channels.

5) Regulatory Overhang: SEC–Ripple Finally Ends

A separate sentiment tailwind: on August 8, Reuters reported the SEC ended its lawsuit against Ripple, with a $125M fine and an injunction focused on institutional sales; the judge upheld that exchange sales aren’t securities. That doesn’t directly legalize all tokens, but it reduces headline risk for majors (and for exchanges listing them). XRP popped on the news, and the broader complex breathed a little easier.

6) Structural Demand: ETFs + Corporate Treasuries Are Soaking Up Supply

Two incremental buyers matter now:

• U.S. spot ETH ETFs: launched in 2024, they’ve had volatile but large flows. After big outflows into Aug 4, Aug 8 saw record net inflows (~$461M) per third-party trackers (Farside/SoSoValue). Net, ETF demand is back as ETH cleared key levels.
  
• ETH Treasury stocks: Standard Chartered’s Geoff Kendrick wrote that companies holding ETH on balance sheet have bought ~1.6% of supply since June, matching U.S. spot ETF accumulation over that span, with NAV multiples normalizing (i.e., market caps converging toward the value of ETH held). Some names (e.g., SBET, BMNR) became “better buys” than the ETFs, in his view, because you’re paying less “wrapper premium.”
  

A Reuters analysis similarly found corporate treasuries held ~966,304 ETH by end-July (nearly $3.5B then), up sharply from year-end 2024. That’s potent non-programmatic demand alongside staking sinks and L2 usage growth.

7) The Hayes Angle: From Bearish Macro to Tactical Long

Hayes’ August 2 macro call—BTC $100k, ETH $3k—wasn’t irrational in a vacuum; tariffs + weak NFP + slow credit growth can break risk cycles. But order flow + policy optics flipped quickly. Once ETH reclaimed $4k, options-market “gamma” and ETF-tape confirmation likely forced fast re-risking—hence his “had to buy it all back” comment. For an experienced macro trader, that’s pragmatism: respect the tape.

His alts mix—LDO (liquid staking), ETHFI (Eigen-aligned infra), PENDLE (yield markets)—leans into ETH beta + yield/infra narratives that tend to outperform when ETH trends and staking yields stabilize. The sizes are modest compared to the ETH clip, but signal intent.

8) Key Levels, Flows, and What to Watch Next

• Levels: Above $4,000, derivatives watchers flagged a $4,000–$4,400 “gamma pocket” where dealer positioning can amplify moves. A daily/weekly close >$4,200 invites tests of prior cycle pivots.
  
• ETF tape: After outflows into Aug 4, the rebound to +$461M on Aug 8 is exactly the “confirmation” momentum traders want to see; sustainability is the question.
• Fed path: The July hold is old news; September odds depend on CPI and evolving tariff effects. Watch Miran’s confirmation and whether “dovish tilt” translates into concrete guidance.
  
• Policy: The 401(k) EO could face implementation friction (fiduciary duty, plan-sponsor risk), but even partial adoption supports long-run flows.
  
• Legal: With Ripple settled, the market shifts focus to other SEC fronts and any Congressional movement on comprehensive crypto rules.
  

9) Portfolio Implications: Three Practical Ways to Express a View

1. Core ETH exposure
   • Spot or U.S. spot ETH ETFs for simplicity and potential inflow tailwinds. Re-add/rotate only above your risk lines (e.g., >$4k). Use options to collar into CPI/Fed weeks if you want defined risk.
     
2. ETH “Treasury” equities basket
   • If you agree with SCB’s “better than ETF” angle while NAVs ≈ 1, a diversified basket of treasury names can offer embedded leverage to ETH with potential equity-alpha (but beware dilution, governance).
     
3. ETH beta via ecosystem
   • LDO / PENDLE / ETHFI are higher-beta expressions of the same ETH-led thesis. Size small, stagger entries, and respect liquidity—these move more than ETH on the way up and down.

Risks: tariff surprises, sticky inflation derailing cut hopes, ETF flow reversal, and regulatory curveballs. Hedging with put spreads into macro prints or running basis trades (spot vs. futures) can cushion volatility.

10) Conclusion

Hayes’ U-turn encapsulates 2025’s crypto regime: macro-sensitive, policy-inflected, and flow-driven. Weak jobs + Fed optics + a 401(k) EO + shrinking legal overhang combined with ETF + treasury demand to squeeze ETH over $4k. If flows persist and policy tilts easier, $4.4k–$5k no longer sounds fanciful; if tariffs bite and data re-accelerate inflation, bulls can still be wrong-footed. Either way, the playbook is clear: watch flows, respect levels, position nimbly.