Ethereum Whales Move 700K ETH - A forewarning of the pump?

A new report from a Santiment has revealed that Ethereum ‘whales’ have moved 700k ETH to exchange wallets in just three days this week.

July 23 2020 | AtoZ MarketsMajor investors in the biggest altcoin Ether (ETH) likely moved almost $200 million to exchanges in a fresh hint that price volatility will now hit.

Data from on-chain analytics resource Santiment on July 23 suggested that 700,000 ETH ($182.7 million) were sent to exchange wallets in just three days this week.

ETH transfers “forewarning of the pump”

The movements coincided with known non-exchange wallet balances declining by roughly that figure. This is an indication that Ethereum whales were preparing to sell or trade ETH en masse. Santiment further added in comments on Twitter saying:

“Nearly 700K $ETH were moved by top 100 whales in the past 3 days. Over this time, the combined balance of the top 100 non-exchange ETH addresses shrank by almost 700K ETH, or about ~$182.7M... “This was likely pre-pump positioning & a forewarning of the pump.”

Top Ether holder balance changes

ETH/BTC has seen renewed interest throughout the past weeks, most likely because of the DeFi token. Another reason for the momentum is Ethereum 2.0. This is the protocol upgrade of Ether’s parent network to launch in August.

At the time of writing, Ethereum is one of the top-performing high capitalization crypto assets. The altcoin surged 11.5% on the day to reach a five-month high of $270.

Can Ethereum whales manipulate the market?

As Ethereum gains popularity and rolls towards mainstream acceptance, smaller investors need to be aware that a large number of ETH is owned by a very small number of people. It is even possible that these Ethereum whales know each other and could possibly coordinate their selling strategies so as to maximize profits. Due to its nature of being a currency and not a security, there is no regulation that prohibits trading as a group to manipulate market prices.

For example, Ethereum creator Vitalik Buterin is reportedly holding around 525,000 ETH. That amount is currently has a market value of around $138 million. Co-founder of crypto hedge fund Tetras Capital, Alex Sunnarborg, claims that the top 100 Bitcoin addresses control 17.3% of all the issued currency and that the top 100 Ethereum addresses control 40% of the entire supply.

The result of this is a pump and dump. This is a scheme that attempts to boost the price through recommendations based on false, misleading, or greatly exaggerated statements, thus leading others to get on board for fear of missing out (FOMO). Next is a consequent sell-off, which dumps the asset value back to what it was previously.

Market domination by a minority of whales is nothing new, though. The banking sector has seen similar action for decades. The bigwigs at the top grow fatter at the expense of the majority. With cryptocurrencies, though, it may be less likely as the founders and big holders are more ideologically oriented. In theory, this makes them less likely to manipulate markets for their own gain.

Are you concerned about the possibility of Ethereum whales manipulating the markets? Let us know your thoughts in the comments below.

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