376 Crypto whales own 30 percent of all Ethereum

May 17, 2019 | AtoZ MarketsA New York-based blockchain forensics firm Chainalysis Inc has recently revealed in its research that just 376 crypto whales own 30 percent of all Ether that powers the Ethereum blockchain.

Crypto whales of Ethereum-who are they?

The term “ whale” refers to investors that have a significant amount of funds in cryptocurrency and might have a huge impact on the market. An individual is considered a whale when he is able to change the value of a coin in a huge amount.

However, according to the latest reports, Ethereum whales account for just 7 percent of transaction activity in the market.

Chainalysis defines crypto whales as individuals who hold their assets in digital wallets and not on an exchange. Kim Grauer, a senior economist at the company, said in a recent interview, that compared to crypto whales of Ethereum, 448 people own 20 percent of all Bitcoin.

Crypto whales of Ethereum impact on the crypto market

According to the Chainalaysis report of  May 1, out of the top 500 holders, 124 were services and the remaining 376 were individual whales, which controlled 33 percent of the circulating supply in 2019. This number represented a decrease in comparison to 2016 when they controlled 47 percent of the market.

According to the latest studies whales consistently hold 25 to 40 percent of Ether’s circulating supply, but only account for between 5 and 18 percent of economic transaction volume. 

To analyze the impact on Ether’s price and intraday volatility, the Chainalysis team used a VAR model, a method commonly used in financial time series analysis.

The company was focusing on Bitcoin‘s price and the activity caused by whales sending funds to and receiving funds from exchanges. The analysis focused on the period of 2016 to 2019. The firm has made the following assumptions based on the data they analyzed:

  • there is no statistically significant impact of Bitcoin prices on Ether’s intraday volatility.
  • funds sent to exchanges by whales don’t directly impact Ether price but do contribute to price volatility.
  • funds that whales receive from exchanges don’t impact Ether’s prices, nor intraday volatility.
  • investor sentiment and the price of Bitcoin are strong indicators of where Ether will trade

Chainalysis also found that approximately 60 percent of crypto whales of Ethereum hold on to their coins or refrain from trading with exchanges on a regular basis and don’t move their cryptocurrency often.

Overall, Chainanlysis’ findings fall in line with the literature on stock market prices and volatility.

Kim Grauer a senior economist at the Chainalysis revealed her plans to turn the crypto whales of Ethereum research into an academic paper.

Grauer plans to analyze the effect of large Ether holders on the market and will discuss the data Wednesday at the Consensus blockchain conference in New York.

Ethereum price outlook

Most cryptocurrencies are now experiencing incredible gains after recovering and following Bitcoin’s upward path. Volumes are also coming back in full force and ETH is now seeing close to $13 billion daily trade volume. Ethereum price remains well supported in early Friday trade, with the second largest cryptocurrency by market capitalization trading close to major intraday support.

Two days ago Ethereum (ETH) was trading at around $230 after a massive 20% price increase over the last 24 hours.

The daily time frame is showing that a large bullish inverted head and shoulders pattern is now present. If ETHUSD bulls can hold price above the $245.00 level the cryptocurrency could continue its recent breakout rally.

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