Original Author: Nancy, PANews

Recently, Bitcoin and Ethereum have driven a significant rebound in the crypto market, leading to increased market activity and frequent movements of whale funds. 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.

Weekly Accumulation Exceeds 270,000 ETH, Heavy Investment in Ethereum LST Ecosystem

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

Overview of Abraxas Capital's Public Address Asset Holdings

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

In terms of asset structure, in addition to Bitcoin valued at over $190 million, Abraxas Capital's investment 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 the vast majority of its total assets. These assets provide both on-chain staking yields and secondary market liquidity, reflecting Abraxas Capital's strategy of balancing stable returns with flexible asset allocation.

From the perspective of capital growth, since mid-February 2025, the institution's asset scale has significantly accelerated, recently surpassing the $1 billion mark. In just the past week (from May 13 to 20), its net asset growth exceeded $130 million, primarily driven by a substantial increase in its AwSTETH (Aave v3 wstETH) position, with an additional investment of over $120 million.

In terms of fund flow, in the past 7 days, Abraxas Capital has withdrawn nearly 270,000 ETH from centralized exchanges (CEX), completing about 6 buy transactions daily, with a total value exceeding $690 million.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

Notably, Abraxas Capital has significantly reduced its Bitcoin holdings within a month. On-chain data shows that in recent weeks, the institution has transferred a total of 2000 BTC to exchanges, valued at over $190 million. However, it has recently begun to increase its holdings again, withdrawing approximately $85 million worth of Bitcoin from exchanges.

According to Arkham data, Abraxas Capital's ETH funds are primarily directed towards 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 an estimated total value of about $440 million at current prices. Notably, Aave is the main use case for Abraxas Capital's ETH holdings, with over $480 million in asset positions currently held on AAVE V3.

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

Asset Scale Exceeds $3 Billion, Former Major Client of Tether

Abraxas Capital Management is an asset management company based in London, regulated by the UK's Financial Conduct Authority (FCA), aiming to build 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 traditional finance, and on-chain data shows that the company began to accumulate Bitcoin assets as early as the end of 2014. In 2017, Abraxas Capital announced a shift in its business focus towards digital assets.

Heka Funds is the core investment platform under Abraxas Capital that focuses on digital assets, headquartered in Malta and regulated by the Malta Financial Services Authority (MFSA), with an asset scale 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 officially licensed and operational digital asset fund in the EU, achieving a return rate of 214.95% since its inception. By the end of 2024, its assets under management had surpassed €1.2 billion; the Alpha Bitcoin Fund, established in 2022, focuses on Bitcoin investments, currently managing $2 billion; and the Alpha Ethereum Fund, established in 2023, focuses on Ethereum, currently managing $4.8 million.

Among these, 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 bought Bitcoin at low prices on Western exchanges and resold it on Japanese exchanges. Initially, Elysium primarily engaged in Bitcoin arbitrage, but as the related arbitrage opportunities gradually narrowed, the fund's strategy shifted towards 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, Deltec showed him Tether's asset proof at that time: over 60% of the reserves were in cash, with the remainder in short-term U.S. Treasury bonds, which gave him full confidence in Tether's 1:1 backing. Subsequently, Heka Funds verified Tether's liquidity through a series of small test trades, gradually increasing the trading scale.

Through continuous trading and cooperation, Heka Funds gradually became one of Tether's largest institutional clients, and it can be said that Heka Funds has also been a driving force behind Tether's rapid development. According to a research report released by Protos in 2021, Heka Funds had received over $1.5 billion in USDT at that time, accounting for about 1.5% of Tether's total issuance. That year, Heka Funds accumulated approximately $52 million in profits, far exceeding the $5.8 million profit achieved by its parent company Abraxas, making it one of the most successful funds within the group. In the past 30 days, Arkham data shows that Heka Funds' trading volume reached $564 million among Tether's main trading counterparts, ranking eighth.

In an early 2025 interview with Protos, Frontini publicly expressed his confidence in Tether again. He pointed out that Tether is earning huge interest income in the U.S. high-interest rate environment, and its business model is very simple yet extremely effective. He also quoted comments from 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 broker, further enhancing his confidence in Tether.

It is worth mentioning that earlier this month, on-chain analyst @DesoGames discovered through tracking the flow of funds within a certain period of Tether that the main direction was towards Abraxas and Cumberland crypto entities. However, the funds were routed through multiple layers of accounts in a complex and opaque manner, which may aim to obscure the source of illegal transactions. The analyst further disclosed that HEKA Funds claimed its net asset value was €1.3 billion but purchased $1.5 billion worth of USDT (Tether issued about $2.5 billion during this period), a figure that clearly exceeds its financial capacity, raising suspicions. Additionally, the shareholders and directors of HEKA Funds were found to appear in offshore leak databases, with complex backgrounds and difficult-to-trace real identities. HEKA Funds may merely be a shell fund used by Abraxas to conceal its real activities, lacking transparency and credibility.

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

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