A new report from a research platform, Diar has revealed that Ethereum ‘whales’ have doubled down on their holdings and have accumulated more tokens as price declines.
December 05, 2018 | AtoZ Markets - As the bear market drags on, some cryptocurrency traders seem to be taking advantage of it as actively trading whales have accumulated more Ethereum (ETH) 3.93% this year than at any other time in its history.
According to the analysis conducted on over 5,200 Ethereum wallet addresses, analysts at the Blockchain research unit Diar discovered that cryptocurrency whales who are regular traders are sitting on 80 percent more ETH than the start of 2018.
These market monsters as a matter of fact, now own more than 20 million ETH ($2.2 billion), roughly 20 percent of Ethereum’s circulating supply. This, of course, represents a four-fold increase in ETH (see graph below) held by top cryptocurrencies since January 2017, when they owned just 5 million Ethereum.
Token market collapse impacts exchange activity
Meanwhile, the recent collapse of the crypto market has had a significant effect on blockchain token and their developers. In the past month, at least 170,000 ETH ($17.7 million) have been withdrawn from their cryptocurrency coffers, making it the third biggest withdrawal period of 2018.
As per the analysts at Diar, the collapse of cryptocurrency token markets can be attributed to the major driving force behind the sudden hoarding of Ethereum, the third largest coin by market value.
While it is noteworthy, that an overwhelming majority of tokens are paired with ETH, it is only reasonable that exiting these markets would result in holding onto Ethereum instead.
According to the latest research, Ethereum addresses belonging to cryptocurrency exchanges saw a rise in the activities from Ethereum traders particularly in the last two weeks of November. (See the chart below)
The research also reveals that in total, traders withdrew approximately $470,000 worth of ETH last month from top exchanges, while overall deposits surpassed 16 million ETH ($1.8 billion).
However, Diar experts pointed out that the increased deposits are not as a result of “new money” from new blockchain investors as there are now 30 percent less Ethereum whales than in January. This, however, means that a more concentrated group of crypto investors is holding significantly more ETH than previous years.
ETH balances rise while value declines
While the Ethereum balances of whales have certainly increased, the total value of those ETH accounts has decreased. When 2018 started, these whales controlled about 11 million ETH, worth $21 billion at the time.
Even though they own 80 percent more ETH, the total sum of whale holdings now reaches just $2.4 billion – an 89-percent drop in overall value since the end of January.
More ETH goes into whale addresses than comes out
On the bright side, the total net balance of deposits, as well as withdrawals for the top Ethereum addresses, has been positive for the year.
Diar analysts, however, concluded that roughly $1 billion has been invested into Ethereum whale wallets this year and stayed there, while ETH received by whale addresses outweighs the ETH sent out of them.
Over the past two months, top Ethereum addresses have seen a 270 percent rise in ETH balances against the previous quarter and this is the first time this has been seen in almost two years.
The firm has noted this isn’t exactly indicative of new money being invested into Ethereum-based markets. Rather, it seems the funds are really being directed to the cryptocurrency whales.
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