Ethereum, the world’s second-largest cryptocurrency by market capitalization, has seen a significant concentration of its supply among large holders, with around 39% of the total supply of Ethereum being held by whale addresses. This is in stark contrast to Bitcoin, where large addresses hold only 11% of the total supply.
The high concentration of Ethereum whales coincides with the network’s increased development activity, particularly with the staking feature being the main highlight for the decentralized finance ecosystem following the Merge upgrade. After months of testing, investors are set to start withdrawing their staked ETH in March after the Shanghai upgrade goes live.
Although the concentration of Ethereum whales has different implications, it could hint at the investors’ future price outlook for the asset. Proponents still bet that the asset might flip Bitcoin as Ethereum undergoes significant developments.
The concentration of crypto wealth in the hands of a few large holders is a controversial topic in digital asset circles. Some argue that it is a natural outcome of the market, while others argue that this concentration of wealth goes against the decentralized ethos of cryptocurrency and could lead to market manipulation.
According to data by Santiment, the top 10 Ethereum whales hold more than 20% of the total circulating supply, while the top 100 Ethereum whales hold over 65% of the circulating supply. On the other hand, the top 10 Bitcoin whales hold around 4.6% of the total circulating supply, while the top 100 Bitcoin whales hold approximately 14% of the circulating supply.
This high concentration of Ethereum whales could lead to market volatility, particularly if these large holders decide to sell their holdings. However, it is worth noting that Ethereum is relatively cheap compared to Bitcoin, making it affordable to amass in large amounts.
The concentration of Ethereum whales could also lead to a more centralized ecosystem, which could go against the decentralized ethos of cryptocurrency. However, proponents argue that this concentration of wealth is a natural outcome of the market and that wealthy individuals should be allowed to hold large amounts of digital assets.
Regardless of varied opinions on the matter, the fact remains that Ethereum’s supply is significantly more concentrated in the hands of a few large holders compared to Bitcoin. This could have important implications for the future of the Ethereum ecosystem and its price.
As of press time, Ethereum was trading at $1,696 with daily gains of over 4%, while Bitcoin is trading at $23,402. It remains to be seen how the concentration of Ethereum whales will affect the future of the asset and the cryptocurrency market as a whole.