The bear market of 2018 has been painful for many investors so far. Bitcoin’s price has fallen 80 percent from its all-time high. Most other cryptocurrencies have also lost 90 percent or more. Prices have fallen so low and have been in the basement for so long that even investors from the beginning of 2017 are selling their stocks. With regard to Ethereum (ETH), however, the picture is different. The blockchain data show that at least some major investors – also known as “whales” in the crypto sector – have held their Ethereum and further expanded their positions.
According to the research data of the Diar newsletter service, about 500 of the 1,000 largest Ethereum addresses are active. Since January 2018, these wallets have accumulated huge amounts of Ethereum. This means they have grown by up to 80 percent. This is stronger growth than ever before in the history of Ethereum. At the end of November, these addresses combined about 20 million Ethereum. This is equivalent to $2.2 billion and represents nearly 20 percent of the total amount of ethereal in circulation.
The increase in positions held by whales may be due to the Initial Coin Offerings (ICOs) of 2017. The tokens from this type of financing have produced particularly poor results this year, making investors shy away from them. Most of the start-up companies that have financed themselves through Initial Coin Offerings have been unable to meet their roadmaps. In addition, there is growing pressure from the SEC and other regulators around the world.
Investors sell smaller ICO “Shitcoins” and retreat to Ethereum
But also the tokens of successful start-ups are traded at considerable discounts compared to the list price. These include tokens from Sirin Labs, which invented the blockchain smartphone. It is therefore not surprising that traders who have diversified their Ethereum holdings into ERC-20 tokens limit their losses and return to Ethereum.
The Diar report says:
“The massive increase in the stock of Ether held by active whales is probably due to the fact that the traders repel tokens paired with Ethereum. These have crashed in every respect since the beginning of the year.”
Interestingly, the increase in Ethereum positions held by whales has not led to an increase in the number of addresses that can be attributed to whales. Rather, the number of these addresses has declined by 30