Glassnode: Bitcoin whales and Ethereum whales are not the same

By Pedro Solimano, Decrypt; Compiled: Pine Snow, Golden Finance

This week, observers found a stark contrast between the big holders of the two top cryptocurrencies on the market, highlighting the seemingly opposite sentiments between Bitcoin and Ethereum whales. According to on-chain analytics firm Glassnode, Ethereum whales, which hold 1,000 or more ETH (worth about $1.5 million), have been on a sharp downward trend since 2020, with $20 million in ETH being sold off.

Bitcoin whales, on the other hand, have been quietly accumulating. Those holding 1,000 or more BTC (about $26.9 million) were essentially flat over the same period, although there were several large declines, possibly due to FTX crashes or profit-taking after a successful 2021 bull run.

The apparent discrepancy in whale activity led to a flurry of theories shared on social media, with prominent figures in the Bitcoin space jumping at the opportunity to shoot their peers in the Ethereum community.

Steven Lubka, head of private customer service at Bitcoin financial services Swan, noted that his firm has found a large number of high-net-worth individuals (HNWIs) looking to swap ETH for BTC. He began by pointing out the legal issues surrounding the industry.

“Ethereum is under regulatory pressure, while Bitcoin is not,” he said.

His voice resonated with Jesse Shrade, CEO and co-founder of Amboss, a lightning network data analytics company.

“Bitcoin offers a simple function: a better currency,” Shrader said. On the other hand, “while Ethereum offers fascinating complexity, it can lose control due to smart contracts and key hard fork protocol changes.” ”

But Glassnode’s data and conclusions don’t seem complete.

“Is the chart adjusted correctly for staking?” Kunal Goel, senior research analyst at Messari, asked. He explains, "Moving to a staking contract may seem like an on-chain sell-off, but it’s not a real sell-off at all. ”

Currently, staking in the Ethereum network requires users to lock (or stake) 32 ETH in a smart contract to help the blockchain validate transactions. This seems to be one of the reasons why large entities are underweighting.

Goel added that while the huge difference in dollar amounts between large holders doesn’t prevent whales from being compared, “the data needs to be right.” ”

André Dragosch, head of research at crypto asset manager Digital Assets (DDA) in Germany, echoed Goel’s view. He called the selling of big Ethereum players “irrelevant” and noted that the proportion of ETH supply in smart contracts has been increasing “synchronously.”

He highlighted on Twitter that Glassnode does not include Ethereum tied to smart contracts in the previously mentioned large account supply indicator. In fact, Dragosch added that the percentage of the Ethereum supply held by the top 1% of addresses has not fallen at all.

At first glance, these numbers may seem to illustrate one thing, but they actually tell a different story: Bitcoin and Ethereum whales continue to be bullish.