Nivéstor

onchain · Friday, May 29, 2026 · 4 min

Don't buy ether.fi at $0.40: every restaking protocol is bleeding money this week

Liquid restaking, the hottest crypto narrative of 2024, lost more than a quarter of its biggest pool's deposits in seven days while US regulators cleared a new path for institutional crypto exposure. Stand aside on ETHFI at $0.40 until the bleeding stops.

$ETHFI$EIGEN$ETH$BTC
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WATCH
$ETHFI
Pay around $0.40
No max price (no trade)
No stop (you are not in)
0% — sit this one out
Watching $0.35

Watch $0.35: 52-week low at $0.3481; a clean tag with TVL stabilization would be the first real buy signal

Watch $0.55: early-May breakdown shelf where supply turned heavy; reclaiming this level would show capital returning to restaking

Why this size: Zero size. This is a stand-aside post. The structural flows are getting worse, not better, so risking even 0.5% of account here is paying for a knife you can wait to pick up off the floor.

When you'd hold this: 2 to 4 weeks, around watch weekly DeFiLlama TVL print; next major restaking event is EigenLayer slashing milestones over the next 21 days

Restaking, the crypto strategy that promised to pay you twice for staking the same coin, just had its worst week of the year. The biggest pool, run by ether.fi, lost more than a quarter of its deposits in seven days while every other major restaking protocol bled in the same direction. Don't buy the ether.fi token (ETHFI) at $0.40 yet, even though it looks cheap, the money is still leaving.

What just happened

Restaking is the practice of taking already-staked Ether and lending it out a second time to other crypto projects for extra yield. Through last year it was the hottest theme in crypto, pulling in tens of billions of dollars.

This week the deposits started running for the exit. The numbers from the public deposit tracker DeFiLlama, which counts dollars sitting inside each protocol4:

  • ether.fi: $3.4 billion in deposits, down 26% in seven days
  • Mellow Restaking: down 30% in seven days
  • Fragmetric (Solana restaking): down 33% in seven days
  • Renzo: down 13% in seven days
  • EigenCloud (the platform behind most of this): down 14% in seven days
  • Babylon (Bitcoin restaking): down 7% in seven days
  • Kelp: down 6% in seven days

That's not one protocol having a bad week. That's the entire category losing customers at the same time.

Separately, on the same day, federal commodity regulators at the CFTC approved Kalshi, the prediction-market exchange, to list a Bitcoin perpetual futures contract5. They also issued guidance categorizing crypto perpetual futures as foreign futures and a policy statement on perpetual contracts generally6. That sounds like dry paperwork, but it matters here.

So what

Here is the chain of cause and effect a normal investor would never piece together.

For the last 18 months, the way to earn juicy yield on crypto was to deposit Ether into a restaking protocol like ether.fi. You got the base staking yield plus extra points and tokens. That's why ether.fi alone got to nearly $5 billion in deposits.

This week, the CFTC cleared a US-regulated venue to offer crypto perpetual futures, the same kind of leveraged trade that drove the most profitable crypto strategies offshore for years. So a US institution that wanted crypto-style yield can now get it through a regulated American exchange instead of through an offshore restaking protocol with smart-contract risk.

That means the marginal dollar that was going into restaking has a new home. The marginal dollar that was already there is comparing the two and finding the new venue safer. And the fear gauge in crypto sits at 23 out of 100 (extreme fear), so capital that's nervous is being asked to choose between a deposit losing 26% of its peers in a week and a CFTC-regulated alternative. Most pick the regulated one. That's why ether.fi's deposits are bleeding, and why the token has lost 79% from its high last year and now sits 14% above its all-time floor.

What to do about it

Don't buy ETHFI yet. The chart looks cheap and the token is up 6% today, but a token whose protocol just lost a quarter of its deposits is not bottoming, it's restructuring.

Wait for one of two signals before initiating. Either deposits at ether.fi stop falling for a full week, which would mean the rotation has run its course, or the token price tests the 52-week low near $0.35 with the daily volume staying calm, which would mean the last sellers are out. Either signal would justify a small starter buy around $0.35 to $0.40 with a target back to $0.55, where the early-May breakdown started.

Without one of those signals, you are betting that the worst week of the year was also the bottom. That's possible. It's not enough to risk money on.

The risk to staying out: if Ether itself rips higher and crypto-fear flips to greed, ETHFI bounces hard from any level and you miss the first 30% of the move.

What we got right (and wrong) before

Three posts back we said don't buy Ethereum at $2,011 because leveraged traders were still betting up despite extreme fear. ETH is now $2,038, basically flat, so that call is intact for now. The ether.fi call here is a more pointed version of the same caution: the underlying asset is heavy, the derivative on top of it (a yield-protocol token) is heavier, wait.

For the nerds

ETHFI spot $0.397, prev close $0.374, day range $0.383 to $0.403, 24h volume $43.3M, 52-week range $0.348 to $1.93. ether.fi Stake TVL $3.415B, change_1d +0.38%, change_7d -26.19%. EigenCloud TVL $5.765B, change_1d -7.32%, change_7d -13.71%. Babylon Protocol TVL $3.726B, change_7d -6.64%. Mellow Restaking change_7d -30.27%. Fragmetric change_7d -33.34%. Renzo change_7d -12.98%. Kelp change_7d -6.10%. Crypto Fear & Greed Index 23 (Extreme Fear). CFTC press release 9240-26 dated 2026-05-29 approves KalshiEX BTCPERP. CFTC release 9241-26 categorizes crypto perpetuals as foreign futures.

Not financial advice. Do your own research.

What we passed on

  • $EIGENPENDING

    The restaking platform itself bled 14% of deposits in a week2 and the token is down 4.8% today; same trade as ETHFI with less liquidity.

  • $REZPENDING-0.7% since pass

    Renzo lost 13% of deposits in seven days3; competing for the same shrinking pool of restakers as ETHFI.

  • $HYPEPENDING

    Already covered five posts back at $60.41; not adding to that thread today.