Ethereum Whales Accumulate One-Third of Total Supply and It’s Not Vitalik
Ethereum (ETH) is the second-largest cryptocurrency by market capitalization, but it has more than just its price to boast about. According to on-chain data, Ethereum whales (addresses) holding at least 1 million ETH, also known as billionaire wallets, now own 32.3% of the total supply. This is the highest level since 2016, when Ethereum was still in its early stages.
The data also shows that transactions worth more than $1 million have increased in volume recently, indicating a growing interest and activity among the large holders of Ethereum. These developments suggest that Ethereum whales are confident in the long-term potential of the second-largest cryptocurrency, despite the recent price correction and selling pressure.
Ethereum is currently trading at around $1,570, facing resistance at the 50-day exponential moving average (EMA). However, the relative strength index (RSI) is close to the neutral zone, signaling a possible bullish reversal.
Who are the Ethereum whales?
One might think that the Ethereum whales are mostly composed of the project’s founders, such as Vitalik Buterin, or early investors, such as Joseph Lubin. However, this is not the case. According to Etherscan, the top 10 Ethereum addresses hold only 5.2% of the total supply, and most of them are either exchanges or smart contracts.
The real Ethereum whales are more likely to be institutional investors, hedge funds, or other entities that have accumulated large amounts of ETH over time. For example, one of the largest Ethereum holders is Grayscale Investments, which manages the Grayscale Ethereum Trust (ETHE). According to its latest report, Grayscale holds 3.17 million ETH, worth over $5 billion at current prices.
Another example is Meitu, a Chinese technology company that recently bought 15,000 ETH and 379 BTC for $22.1 million and $17.9 million respectively. Meitu said that it believes in the blockchain industry and that Ethereum has “ample room for appreciation.”
Why are Ethereum whales bullish?
There are many reasons why Ethereum whales might be bullish on the future of the network. One of them is the upcoming transition to Ethereum 2.0, which will switch the consensus mechanism from proof-of-work (PoW) to proof-of-stake (PoS). This will make Ethereum more scalable, secure, and energy-efficient.
Another reason is the growing popularity of decentralized finance (DeFi), which is mostly built on Ethereum. DeFi is a term that refers to various financial applications that run on smart contracts without intermediaries. DeFi offers users access to services such as lending, borrowing, trading, investing, and more.
According to DeFi Pulse, the total value locked (TVL) in DeFi protocols has reached over $40 billion, a tenfold increase from a year ago. This shows that there is a high demand for decentralized and permissionless financial solutions, which Ethereum enables.
A third reason is the increasing adoption of non-fungible tokens (NFTs), which are unique digital assets that represent anything from art and music to gaming and sports. NFTs are also mostly based on Ethereum and have exploded in popularity in recent months. According to NonFungible, the total sales volume of NFTs has reached over $342 million in 2021 so far, surpassing the entire volume of 2020. Some notable examples of NFTs include Beeple’s digital artwork that sold for $69 million at Christie’s auction house and NBA Top Shot’s collectible cards that have generated over $230 million in sales.