A wind of change is blowing around Ethereum, the world’s second largest cryptocurrency. Despite the recent price drop, the network has seen a surge in new user activity, sparking optimism. But the enormous influence of large holders known as whales continues to cast a long shadow.
Opening a new wallet for business
Data from blockchain analytics firm Santiment shows a surge in new Ethereum wallets, including a record 267,000 created on April 28 and 29. The inflow marks the highest two-day increase since October 2022 and suggests there may be renewed interest in the Ethereum network.
📈 #Ethereum As April came to an end, I saw a milestone. 266.6K new wallets were created on April 28th and 29th, the highest two-day network growth since October 8th and 9th, 2022. $ETH It continues to expand despite falling prices. https://t.co/SN6xqc3JXV pic.twitter.com/KDcjhY30y5
— Santiment (@santimentfeed) May 1, 2024
This trend ignores the current market downturn, where many cryptocurrencies are experiencing significant price declines. Analysts speculate that the increase in new wallets may be driven by several factors, including:
- Expectations for future growth: Investors may be banking on the network’s long-term potential and looking forward to upcoming Ethereum upgrades that promise improved scalability and security.
- Bargain Hunters: The recent price drop may appear to be an attractive entry point for new investors looking for a discount on Ethereum.
About minnows and whales
While the number of new users is encouraging, a closer look at Ethereum’s address distribution reveals stark differences in reserves. According to CoinMarketCap, a whopping 97% of Ethereum addresses hold between $0 and $1,000 worth of cryptocurrency. This refers to a large pool of small investors, often referred to as “minnows.”
But the real power lies with a select few. Whale tracking platform Clank estimates that whales, which represent just 0.10% of all Ethereum addresses, control a whopping 41% of the total circulating supply. This means that each whale holds an average of about 10 million ETH, which is worth a whopping $3.7 million.
Ether market cap currently at $362 billion. Chart: TradingView.com
Staying Steady: A Vote of Confidence?
Despite the recent price drop, Ethereum appears to be weathering the storm better than the broader cryptocurrency market. In fact, Ethereum is up more than 30% year-to-date (YTD) from its market price of around $2,282.
The current market capitalization of Ethereum is $3,014, with a total market capitalization of $362 billion. In particular, the market experienced an average decline of 8.75% over the past week, highlighting Ethereum’s relative resilience.
Source: CoinMarketCap
Additionally, data shows that the majority (74%) of Ethereum investors are long-term holders, showing strong faith in the future of the project. This “holding” mentality represents a willingness to maintain Ethereum positions for the long term despite short-term market fluctuations.
Featured image from Pixabay, chart from TradingView
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Source: NewsBTC.com