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There was a large number of Ethereum holders, also known as Ethereum whales Accumulation trend For some time now, as on-chain data reveals a stunning increase in their collective holdings. especially, Data from blockchain analytics company IntoTheBlock shows that Ethereum whales now own about 43% of the total circulating supply of ETH.
The imbalance in ETH holdings raises important questions about it Implications for the price of Ethereum Market dynamics are moving forward.
Whale accumulation has increased by more than 90% since early 2023
According to IntoTheBlock, the total concentration of ETH in whale addresses is Currently at 61.09 ETHWhich represents about 43% of the total supply. This represents a significant shift from early 2023, when whales owned just 22% of the circulating supply of Ethereum. IntoTheBlock classifies whale addresses as those holding more than 1% of the total circulating supply of ETH.
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The nearly doubling of Ethereum whale holdings in just one year is a noteworthy development. Naturally, such a concentration of a large amount of cryptocurrencies in a few wallets would spell doom for the asset, because it means that a few players will be able to manipulate the price dynamics as they please. However, the case of Ethereum deviates from this narrative due to the unique nature of its ecosystem and recent structural shifts within the network since 2022.
The sharp rise in whale concentration can be attributed to two main factors: the Ethereum merger and increased gravity ETH staking to earn rewards. The Ethereum merger, which occurred in 2022, moved the blockchain from a proof-of-work (PoW) system to a proof-of-stake (PoS) mechanism.
As such, in-depth data from IntoTheBlock, showing that 61.09 million ETH is concentrated in just three whale addresses, makes a lot of sense.
What this means is that these ETH are mostly those locked in the proof-of-stake staking algorithm used by block validators on the Ethereum network. By locking up their Ethereum, Ethereum miners and large holders not only reduced the circulating supply, but also contributed to higher prices by reducing the amount of digital coins. Ethereum is available for trading.
Ethereum Holder Dynamics – Investors and Retail Traders
The increase in ETH among whale addresses means less availability of ETH for investors and hash holders. IntoTheBlock classifies investors as addresses that hold between 0.1% and 1% of the total circulating supply, while retails are those that have less than 0.1% of the total circulating supply.
At the time of writing, there are 42 investor addresses and they collectively hold 15.2 million ETH, which translates to 10.77% of the total circulating supply. Considering that the addresses of the three whales do not influence price dynamics much, investors’ addresses carry great importance But parts are more liquid ETH has a greater ability to influence market movements. Any significant sell-off from these investor addresses could lead to a sharp decline in the price of Ethereum.
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On the other hand, retail traders, who make up more than 99% of ETH addresses, are left with 46% of the total circulating supply. At the time of writing, Ethereum is trading at $3,225 and is down 2% in the past 24 hours.
Featured image from Pexels, chart from TradingView