A stark contrast has become apparent this week between large holders of Bitcoin and Ethereum, the two top cryptocurrencies in the market. On-chain analysis firm Glassnode has revealed that Ethereum whales, who hold 1,000 or more ETH (equivalent to roughly $1.5 million), have been selling off their holdings at an alarming rate since 2020. Over $20 million ETH has been sold off during this period.
On the other hand, Bitcoin whales have been quietly accumulating their holdings. Those holding 1,000 or more BTC (equivalent to roughly $26.9 million) have remained mostly flat over the same time period, with a few sharp drops possibly due to the FTX collapse or profit-taking after a successful 2021 bull run.
The disparity in activity among the whales has led to various theories being shared on social media, with figures in the Bitcoin community taking the opportunity to criticize their Ethereum counterparts.
Steven Lubka, head of private client services for Bitcoin financial services Swan, reported that his company has seen a significant number of high-net-worth individuals (HNWI) looking to exchange their ETH for BTC. He cited regulatory concerns as the main reason for this shift.
Jesse Shrader, CEO and co-founder of Amboss, a data analytics firm for the Lightning Network, agreed with Lubka’s sentiment. He stated that while Ethereum offers complex features and smart contracts, it risks losing focus due to these complexities and frequent protocol changes.
However, the conclusions drawn from the Glassnode data may be incomplete. Kunal Goel, senior research analyst for Messari, questioned whether the data accounted for staking in the Ethereum network. Transfers to a staking contract might appear as selling on-chain but are not actually selling. Users currently need to lock 32 ETH in a smart contract to participate in staking, which could explain the alleged drop in holdings by large entities.
Goel emphasized the importance of accurate data and noted that the large difference in dollar amounts between the holdings of Bitcoin and Ethereum whales should not disqualify them from being compared.
André Dragosch, head of research for Deutsche Digital Assets, echoed Goel’s views, describing the Ethereum whale-selling drama as a “nothing burger.” He pointed out that Glassnode’s metric for whale supply does not include ETH tied in smart contracts. Furthermore, the percentage of ETH supply held by the top 1% of addresses has not declined at all.
Ultimately, while the initial numbers seem to suggest a bearish sentiment among Ethereum whales, a closer examination reveals a different story. The Bitcoin and Ethereum whales continue to demonstrate bullish behavior.