Who is the new Whale of Ethereum, Abraxas Capital? Accumulation of over 270,000 ETH in a single week, Tether's "mysterious" major client.

Author: Nancy, PAnews

Recently, Bitcoin and Ethereum have driven the market, leading to a significant rebound in the cryptocurrency market, with noticeable increases in market liquidity and frequent actions from whales. Among them, London-based asset management company Abraxas Capital has become a focal point in this rebound due to its high-frequency on-chain operations and heavy investment in Ethereum DeFi strategies.

In a single week, over 270,000 ETH was accumulated, heavily investing in the Ethereum LST ecosystem.

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

Abraxas Capital Public Address Asset Holding Overview

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

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

In terms of capital growth pace, since mid-February 2025, the institution's asset scale has significantly accelerated, and recently it briefly surpassed the 1 billion USD mark. In just the past week (from May 13 to 20), its net assets increased by over 130 million USD, with the growth largely attributed to a substantial increase in positions of AwSTETH (Aave v3 wstETH), with an additional investment of over 120 million USD.

In terms of capital flow, over the past 7 days, Abraxas Capital has withdrawn nearly 270,000 ETH from CEX (centralized exchanges), completing about 6 buy transactions per day on average, with a total value exceeding 690 million dollars. Based on its average purchase price of 2573.8 dollars, compared to the current market price of ETH at around 2500 dollars, this portion of the position is currently in a temporary unrealized loss of about 11 million dollars.

It is worth noting that Abraxas Capital significantly reduced its holdings of bitcoin in a month. On-chain data shows that the institution has transferred a total of 2,000 BTC worth more than $190 million to exchanges over the past few weeks. Recently, however, it has begun to regain its holdings, withdrawing about $85 million worth of bitcoin from trading platforms.

According to Arkham data, Abraxas Capital's ETH funds are mainly flowing into Ethereum DeFi protocols. In the past 7 days, Abraxas Capital has transferred over 174,000 ETH to mainstream DeFi protocols such as Aave, Ether.fi, and Compound, with a total estimated value of approximately $440 million at current prices. Notably, Aave is the primary use case for Abraxas Capital's ETH holdings, with its asset position on AAVE V3 exceeding $480 million.

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

Assets exceeded $3 billion, previously a major client of Tether.

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

Abraxas Capital initially focused on the traditional finance sector. On-chain data shows that as early as the end of 2014, the company had begun to布局 Bitcoin assets. In 2017, Abraxas Capital announced that it would shift its business focus to digital assets. Heka Funds is the core investment platform under Abraxas Capital, focused on digital assets, headquartered in Malta, and regulated by the Malta Financial Services Authority (MFSA), with assets exceeding $3 billion.

As a multi-fund investment company, Heka currently manages three main funds: the Elysium Global Arbitrage Fund, launched in 2017, is the first digital asset fund in the EU to obtain official approval and operate officially, with a return of 214.95% since its inception. By the end of 2024, its assets under management have surpassed 1.2 billion euros; the Alpha Bitcoin Fund was established in 2022 and focuses on Bitcoin investment, currently managing 2 billion dollars; the Alpha Ethereum Fund was established in 2023 and focuses on Ethereum, currently managing 4.8 million dollars.

Among them, the Elysium fund is the main business of Heka Funds, initially entering the market with a Bitcoin arbitrage strategy, inspired by a small arbitrage fund that once bought Bitcoin at low prices on Western trading platforms and resold it to Japanese trading platforms. Initially, Elysium mainly engaged in Bitcoin arbitrage, but as the relevant arbitrage opportunities gradually narrowed, the fund's strategy gradually shifted to stablecoin arbitrage.

In 2019, Fabio Frontini first met with Tether's CFO, Giancarlo Devasini, and was invited to the Bahamas to meet with Tether's banking partner, Deltec Bank. According to Frontini's recollection, Deltec showed him proof of Tether's assets: more than 60% of the reserves were cash, and the rest were short-term U.S. Treasuries, which gave him full confidence in Tether's 1:1 support. Since then, Heka Funds has verified Tether's liquidity through a series of small test transactions, gradually increasing the size of the trade.

With continuous trading and cooperation, Heka Funds has gradually grown into one of Tether's largest institutional customers, and it can be said that Heka Funds is also the driving force behind Tether's rapid development. According to a research report published by Protos in 2021, Heka Funds received more than $1.5 billion in USDT at that time, accounting for about 1.5% of Tether's total issuance. During the year, Heka Funds made approximately $52 million in profits, far surpassing the $5.8 million earned by parent company Abraxas, making it one of the most successful funds within the group. In the past 30 days, Arkham data shows that in the past 30 days, among Tether's major counterparties, Heka Funds has traded $564 million, ranking eighth.

In an interview with Protos at the beginning of 2025, Frontini again publicly expressed his confidence in Tether. He pointed out that Tether is earning huge interest margin income in the high interest rate environment in the United States, and its business model is very simple yet extremely effective. He also referenced comments made by Howard Lutnick (CEO of Cantor Fitzgerald) at the 2024 Davos Forum, stating that Tether's assets are mainly held by Cantor, the largest U.S. treasury brokerage, further reinforcing his confidence in Tether.

It is worth mentioning that earlier this month, on-chain analyst @DesoGames traced the flow path of Tether's funds in a certain cycle and found that it mainly flowed to Abraxas and Cumberland crypto entities. However, funds are subjected to complex and opaque circumventions through multi-tiered accounts, which may be designed to conceal the origin of illegal transactions. The analyst further disclosed that HEKA Funds, which claims to have a net asset value of €1.3 billion, purchased $1.5 billion worth of USDT through HEKA (Tether issued about $2.5 billion more during the cycle), an amount that is clearly beyond its financial capacity and is suspicious. At the same time, the shareholders and directors of HEKA Funds were found to have appeared in an offshore leak database, with a complex background and real identities that are difficult to trace. HEKA Funds may just be shell funds used by Abraxas to conceal their true activities, lacking transparency and credibility.

Currently, from the on-chain trends, as the structure of the crypto market continues to financialize and the arbitrage opportunities for early stablecoins gradually narrow, Abraxas Capital is also exploring the expansion of its strategy into a more sustainable Ethereum staking and lending ecosystem.