Ethereum Whales Double Ethereum Holdings During Bear Market
Ethereum whales have capitalized on the decline in prices to double down on their ETH holdings, increasing it by nearly 80 percent new research shows.
Market turmoil in 2018 good for whales
The current rot in the cryptocurrency market has been with us for most of 2018, with the year-long bearish market leading to price declines of 80 percent for Bitcoin (BTC). The pioneer crypto asset has seen its value drop from an all-time high of $20k reached in December 2017 to lows of $3,800 at the moment.
For the altcoin market, it has been far much worse, with most losing up to 90 percent value since the turn of the year.
The result of the enduring price decline, which has taken too long and defied predictions and forecasts, has led many investors to cash out, hoping to escape any further losses.
That, to any other investor, would seem to be the sensible thing to do. However, in cryptocurrency, there is that group of investors that invest for the long-term. They hold (it’s called hodling in crypto investing circles) through downturns, often leveraging market sell-offs to “buy the dip.”
That is precisely what a group of large-scale Ethereum (ETH) holders are shown to have done throughout the bear market.
Ethereum whales increase holdings by 80 percent
Ethereum “whales,” which is what the market calls large-scale holders of given crypto, have over the last few months, continued to buy ether even as prices reached close to $100 from a high of $1,400 earlier in the year.
According to research platform Diar, Ethereum whales have accumulated vast amounts of the token throughout the year, capitalizing on the falling prices to amass billions of dollars worth of the crypto.
The document reveals that among the 1,000 largest Ethereum addresses, about 500 are currently actively-traded.
These wallets, the research platform says, have bought a massive amount of ether in the year, more than at any other period in Ethereum’s history. That has seen the whales grow their ether holdings nearly four times or by about 80 percent since early January.
According to the report, the select large-scale hodler addresses together held about 20 million ETH coins as of November 2018, which is worth over $2.3 billion. Notably, this figure accounts for 20 percent of Ethereum (ETH)’s circulating supply.
As per Diar’s analysis, ETH whales have capitalized on traders who invested in Initial coin offerings exiting as a result of plummeting prices for ICO tokens- incidentally some of the worst hit tokens.
Most ICO tokens have traded below their crowd sale prices, losing up to 90 percent and forcing investors to liquidate their holdings.
Other factors contributing to the exit of traders from the ER-20 token market could be tied to the increased pressure from global regulatory agencies like the US Securities and Exchange Commission (SEC), and others have exerted on ICO platforms.
The increase in the overall amounts of ETH held by whales does not, however, mean that the number of Ethereum addresses that can be classified as whales has increased.
Diar’s report shows that active whale addresses have reduced since January, shrinking by about 30 percent. It is this scenario that has seen more of the ether land in the hands of a small group of whales.
However, the statistics also show that overall; ETH is less-concentrated as it was at the start of 2017. At the moment, whales hold 20 million ETH coins, compared to about 33 million then, which was over one-third of Ethereum’s total supply.
(Source: Diar Research)
Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.