Ethereum is the second-largest cryptocurrency by market cap. Over half the supply is owned by 104 people. We discuss what this means in the text below.
As of this month, a gargantuan 57% of all the world’s Ethereum is held by but 104 people. In fact, they are stored in 104 wallets, meaning the number could be less if a person has multiple storage locations. In fiat terms, this amounts to around $333.01 billion. But what does it mean for investors?
Crypto Whales Holding Supplies
For investors, this should show confidence in the market. Typically, when large buyers known as whales accumulate a currency, it signals a trend that goes upwards and continues for the long term.
According to a post on Twitter, lower-level buying was actually at an all-time low. This included wallets that hold between 100 and 100,000 ETH, which now account for 33 to 46% of the supply. Just under 10% of wallets have less than $100 in value. This suggests that while whales are building, typically a positive sign, the retail sector is not following and may have some reservations about Ethereum.
When large groups of investors hold supplies, it reduces the availability of the open market. This then drives the Ethereum price upward. When prices increase and they decide to sell, it can often spook markets and send them into a downward spiral. This recently occurred when Vitalik Buterin, the founder of Ethereum, sold some of his supply.
Bitcoin or Ether?
It may also be that Ethereum retail investors have failed to see the whale activity because they are too busy chasing Bitcoin. This begs the question of which you should place a claim on.
Ethereum has had a poor 2024 and has only seen a real rally in the last two months. It was only in October when its yearly gains were an eye-wateringly bad 5%. This has been at a time when Bitcoin has had somewhat of a golden year. However, a few factors signal that Ethereum is going to break out and start a bull run.
The first is that the season for altcoins is approaching. These are any cryptocurrencies other than Bitcoin. Struggling to keep up, may also show that Bitcoin is overvalued. When this happens, people begin to look elsewhere, and Ethereum is the best place to do it.
In contrast, Ethereum could be severely undervalued. It is still below its all-time peak, unlike Bitcoin, and it plays an integral part in the infrastructure of Web3 development. In terms of decentralized finance, it holds 55% of all value. Should this be adopted in more everyday uses, it could see a huge boost to Ethereum.
Ethereum Price High
All of these factors have had many predicting that a new all-time price high for Ethereum is on its way. Ethereum has struggled to pass the $4000 mark, possibly because of some trepidation regarding competing blockchains and how it will perform in the future. However, the gears may have started slowing for Bitcoin, which will inevitably see people turn to Ethereum.
At the time of writing, Ethereum managed to hit $4,108; it is likely to start a bull run. This could see it push up to $4800, and it may go further to the $5000 mark. It may even do this before the year is out, and that is close at hand. Rallies for cryptocurrency always come around the Christmas period, and Bitcoin’s resurgence may be partly fueled by this. It could spark Ethereum’s run.
In the last week alone, Ethereum has gained 8%. It is 82% up over the last year and has now risen 28% over its previous 30 days. This puts it just 18% away from its all-time high of $4,891. There has also been a marked increase in trading volume for Ether, up by 30%.
Ethereum ETFs
One other signal is the turnaround for Ethereum ETFs. Exchange-traded funds for both Bitcoin and Ethereum were approved by the Securities and Exchange Commission this year. Bitcoin ETFs have had a very positive year, while Ethereum ones have had a lukewarm reception. That was until recently.
Since November, spot Ethereum ETFs have seen huge numbers of inflows. In one week alone, they reached inflows of $854.85M, the highest to date. This has been the third consecutive week of positivity, which has also helped push the coin past the $4000 mark. These products now have $14B in total assets.
All investments carry a risk, and cryptocurrency is more volatile than many. Yet all the signs are there for Ethereum. These include positivity on the markets, increased inflows to ETFs, and a possible cooling down of Bitcoin. Yet it is the hoarding of the currency by whales that is the biggest indicator. It may be the time to buy and hold as Ethereum enters a new chapter.
