Report: 1/3 of the world's ETH is held by 376 individuals, but only accounts for 7% of ETH transaction liquidity
Produced by Odaily
Translator | Wang Ye
Editor | Lu Xiaoming
Produced by Odaily
Translator | Wang Ye
Editor | Lu Xiaoming
The essence of blockchain and cryptocurrency is decentralization. However, there is a very centralized phenomenon in the cryptocurrency world. More than 30% of ETH and 20% of BTC are in the hands of a very small number of large investors. In the encrypted world, it is called "giant whale". Recently, BTC has risen sharply, and mainstream currencies represented by ETH and XRP are also showing a rising trend following the BTC market. And these "giant whales" are often mistaken by everyone as the "driving force" behind the surge in BTC and mainstream currencies.
On May 15th, Chainalysis researchers conducted an in-depth study of the "giant whales" holding ETH, and found that these "giant whales" only accounted for 7% of ETH's trading volume, and they did not have any driving effect on ETH's surge. However, from day trading In terms of volume, their large sell-off of ETH has greatly improved the liquidity of the market.
Although the "ETH whale" holds a large amount of ETH, it rarely "activates" in the market
Chainalysis defines account holders whose cryptocurrency holders rank among the top 500 in the world as “giant whales,” excluding those services that store their encrypted assets outside of exchanges. Distinguishing whales from services is the most difficult part of the report, and can only be done with years of blockchain data linked to real-world entities. According to Chainalysis' analysis and calculation on May 1, among the top 500 accounts, 124 are service projects, and only 376 are "giant whales". Chainalysis found that these 376 ETH whales held 33% of the total ETH in 2019, a drop from 47% in 2016.
Although these "whales" have always controlled a large amount of ETH, it is strange that these "whales" only account for a small fraction of ETH transaction volume. The ETH held by giant whales has always accounted for 25-40% of the total ETH, but only 5%-18% of the ETH transaction volume. This is because most of the "big whales" (about 60%) hold ETH for a long time and do not trade ETH, or they do not trade with exchanges on a regular basis.
Most "ETH whales" are not active ETH traders
"ETH Whale" will not affect ETH price, but will increase the volatility of ETH intraday price
Is it possible for "ETH whales" to place large orders on exchanges to increase the price of ETH? Are they behind the recent surge in ETH? Chainalysis conducted research on this question, focusing on ETH because of its higher concentration of wealth compared to other major cryptocurrencies.
So far, most analyzes show that there is not enough data to prove that these "giant whale" activities drive the rise in ETH prices. Chainalysis uses a "vector autoregressive model" (VAR model, which explains the interdependence between price and flow variables) for analysis. Estimate the impact on ETH price and ETH intraday volatility through the VAR model:
BTC price
The amount of ETH transferred by the "giant whale" to the exchangeThe amount of ETH transferred out of the exchange by "giant whales"Based on these three variables, Chainalysis analyzed ETH activity during 2016-2019 and found the following:
The price of ETH fluctuates with the price of BTC. On average, on May 14,
For every 1% increase in BTC price, ETH price will increase by 1.1%
