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Ethereum Whales have increased their possessions more than 4% in the last 6 months. At least this is the appreciation of an analyst who recently claims to have manually audited 10,000 Ethereum addresses.
According to Adam Cochran, a partner at the autonomous organization Metacartel Ventures, new Ethereum whales could have an unusual influence on this market. His most recent personal research contrasts with other indicators that could reveal the effect of the current distribution of funds on market manipulation.
In his April 29 post, Cochran suggests that large purchases associated with fiat money exchange ramps such as Gemini, Kraken, and Coinbase are being made. These are acquisitions from the last 6 months. According to Cochran, these New whales entered the Ethereum market with purchases from 100,000 ETC to 250,000 ETH. It is approximately USD 100 million. Adding to what the oldest whales accumulate, we get the $ 650 million mark.
Other recent reports, released via Reddit, also indicate that the Grayscale Ethereum Trust purchased the equivalent of 48% of all ethers mined in 2020.
Do Bitfinex and BitMEX manipulate the Ethereum market?
Cochran claims that at least 12 whales could be manipulating the Ethereum market. First, because there is an increase in ethers short movements. Then they start with BitFinex, then BitMEX and later other exchanges.
Whales begin to send batch transactions for a few days to Bitfinex, Coinbase, Kraken, Bitstamp and Bitflyer. They then make small repeated transactions that would not be noticed by systems like WhaleAlerts. Finally the funds return to the original addresses in a period of 2 to 6 weeks.
Stuart Hoegner, Bitfinex General Counsel denied this behavior, assuring Cryptonews.com that the exchange office “does not collaborate with its clients in manipulating cryptocurrency markets.” BitMEX has yet to comment.
What does seem true is that platforms like WhaleAlerts have identified these great movements of ethers. A few days ago, a group of Ethereum whale transactions were recorded. Together, they represented 1.2 million ETH, more than USD 240 million. The transactions occurred in a day shortly before ether hit $ 200 in the market.
Do whales and miners accumulate ethers?
The top 1,000 of Ethereum addresses represents 42.5 million ETH. The top 100 represent 26.4 million ETH, according to Cochran. For the group Saintment, the percentage of ether supply of the main 100 portfolios corresponds to 25% of the total. A sign that the whales could be accumulating ether in the expectation that the price will rise. However, they caution that this retention of ether will not be reflected in a price increase in the short term.
Sainment indicates that Ethereum’s top 100 portfolios or addresses represent a plurality of investors. Because only about 20 of these addresses are identified. And you belong to big exchange houses.
In fact, TokenAnalyst indicates that Huobi, Binance, Bitfinex, Poloniex, Okex, Gemini, Kucoin, Bitstamp, Kraken and Bittrex together hold 18.5 million ETH. This equals 16.8% of the total circulating cryptocurrencies.
Cochran also suggests that Ethereum miners have emitted 1.5 million ethers in the past 6 months. But that at least 20% of these are accumulating as a measure before the arrival of Ethereum 2.0. This update would provide benefits for those entities that have ethers.
On the other hand, around 80% of miners appear to be selling their ethers. Which means they’ll switch to other Proof of Work chains once Ethereum moves to Proof of Stake: That “could be great for ETH’s little brother ETC,” says Cochran.
A year ago
A 2019 Chainalysis research suggested that 30% of all ether plus 20% of all bitcoins were whale controlled.
Unlike other investigations, this report discriminated ether addresses that were not linked to bureaux de change. This was the most difficult aspect of the investigation, which involved 500 addresses. And they discovered that only 7% of Ethereum transactions came from these, with great repercussions in the market.
Some of the conclusions of that analysis suggested that the activity of ether whales did not affect the price of the cryptocurrency, but its inter-day volatility did.
On the other hand, some information gathered by CryptoNews suggests that the number of whales in Bitcoin reaches their highest point in almost two years. Probably as a result of an expectation of a price increase.
Do Whales Matter?
Cochran suggests that there is parity between the top two cryptocurrencies in terms of distribution. In the case of Bitcoin, the main 10,000 addresses gather 10.54 million BTC (57.44%). That same number of addresses on Ethereum represent 57.2 million ETH (56.70%).
However, he argues that about 57% of existing bitcoins have been idle for more than a year. On the other hand, 21% have not been in motion since 2015 and only 0.36% have gone through a payment gateway in the last two years. “When it comes to being money, ETH uses 440 times more than Bitcoin to transact,” he deduces.
Many in the ecosystem disagree. Rafael Schultze-Kraft, co-founder and CTO of cryptocurrency researcher Glassnode, argued that excluding those 0 ETH transactions, related to smart contract calls and large internal transaction chains not initiated by externally owned accounts (EOA) , so “Ethereum and Bitcoin are really very comparable.”
For his part, Torbjørn Bull Jenssen, the CEO of cryptocurrency research firm Arcane Research, suggests that the metric Cochran uses is not good. “It is clear that Bitcoin is much bigger and transfers much more value than ether”he assured.
“A small part of the coin, which changes hands often, can have a major economic impact,” said Jenssen. “It is also important to keep in mind that saving in bitcoins and other cryptocurrencies, which are maintained over time, is a form of monetary use,” he concluded.
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