AAVE, the decentralized crypto lending platform, experienced a significant drop of 20% in price in 2024, despite witnessing a doubling in the total value of assets locked on its platform. This increase in assets locked is typically seen as a positive sign, indicating trust and relevance among market participants. However, AAVE’s whale investors, specifically those holding between 1 million and 10 million AAVE tokens, have actually increased their holdings by over 75% during this period.
Interestingly, these AAVE whales have been distributing their holdings at losses over the past three months, according to on-chain tracker Santiment. This suggests that despite the increase in their holdings, these whales have been selling their AAVE tokens at a lower price than when they acquired them.
Despite the overall increase in the total value of locked assets, AAVE itself has lost nearly 20% of its value year-to-date. However, the platform’s TVL has been steadily rising, reaching $12.464 billion in 2024, indicating the growing adoption of AAVE among DeFi traders.
The three largest components of AAVE’s TVL are WSETH, WBTC, and WEETH, with the majority of assets locked on the Ethereum chain. AAVE’s TVL growth seems to be driven by market participants continuing to lock assets on the platform, even as the AAVE token’s price declines.
In addition, data from Santiment reveals that whale investors holding between 1 million and 10 million AAVE tokens have been increasing their holdings by more than 75% in 2024. However, on the flip side, the same data shows that these whales have also realized losses on their AAVE holdings in the past three months.
AAVE’s price decline persisted, with another 5% drop on Thursday. In the past week, the token’s price has dipped by about 18% on Binance. Furthermore, there has been an increase in AAVE’s supply on exchanges, indicating a rise in selling pressure and potentially posing a risk of further price decline.
Overall, despite the positive growth in the total value of assets locked on AAVE, the token’s price has not reflected this increase, leading to losses for whales. The selling pressure on AAVE and the spike in supply on exchanges may continue to impact its price in the near future.