As previously reported, Bitcoin enthusiasts have held onto their digital assets with unwavering commitment over the past few months. Remarkably, Bitcoin’s major holders, often referred to as “whales,” continue to amass more coins despite the prevailing uncertainty surrounding Bitcoin’s future trajectory. The data from Glassnode’s HODLer Net Position Change indicator reveals that long-term holders are consistently adding an average of 50,000 BTC to their wallets each month.
On the flip side, the situation with Ethereum, the world’s second-largest cryptocurrency, takes a different course. On-chain data reveals that while Bitcoin whales continue to accumulate, Ethereum whales have seemingly opted to unload their holdings in recent years.
Bitcoin Whales are Accumulating, Ethereum Whales are Selling
The term “Bitcoin whales” refers to individuals or entities holding 1000 BTC or more, and they have been steadily accumulating more BTC since 2018, as per insights from on-chain analytics firms. Of course, there have been instances of sell-offs, triggered by prolonged bear markets or profit-taking following significant bullish trends.
According to a post by James Straten, a research analyst at Cryptoslate, Ethereum whales with holdings exceeding 1,000 ETH have been engaging in selling activities over the same period. He highlighted a correlation between the whale behavior on both blockchains using a chart provided by Glassnode.
On-chain data indicates that ETH whales have offloaded 20 million ETH since 2022, with a substantial 12 million ETH sold off in this year alone.
Potential Explanation for the Contrasting Whale Behavior
The story told by these on-chain metrics provides valuable insights into the sentiments prevailing among prominent crypto holders across different blockchains.
While the reduction in ETH holdings by whales might suggest they are selling or diversifying into other cryptocurrencies, another plausible explanation could be that these whales have moved their ETH into Ethereum smart contracts. Since the inception of Ethereum version 2.0 in December 2020, the volume of tokens staked within the protocol has grown significantly.
ETH 2.0 mandates validators to stake 32 ETH in its deposit contract for transaction validation on the Ethereum blockchain.
Presently, the contract boasts 31.2 million ETH, amounting to $48.6 billion. This observation aligns with on-chain data, which shows that the proportion of ETH supply locked in smart contracts surpassed that held in addresses with 1000+ ETH since late 2020.
Crypto research analyst André Dragosch further supported this correlation on the social media platform X, emphasizing that Glassnode’s data does not account for ETH locked in smart contracts when measuring whale holdings.
Ethereum, commanding a 17.8% share of the entire cryptocurrency market, continues to affirm its role as the dominant smart contract platform. Diverging from Bitcoin whales, bullish ETH whales are not merely holding onto their assets but are actively employing strategies to optimize their crypto gains.
As of the time of writing, ETH is trading at $1,557. However, it’s worth noting that a recently failed bullish pattern formation could potentially drive ETH’s price below the $1,000 mark.