Unlike traditional assets, where each transaction is not recorded in a central database shared with the world, leading cryptocurrencies Bitcoin and Ethereum are almost entirely transparent.
While you may not know who is behind an address, firms and individuals all have access to every single transaction that takes place on these networks.
It is a nearly inescapable fact with public cryptocurrencies that many have used to their advantage, analyzing data to get an edge over other investors and users.
Adam Cochran, a partner at Metacartel Ventures and an adjunct professor at Conestoga College in Canada, recently made this much clear when he released a 109-part Twitter thread outlining how his analysis of the top 10,000 Ethereum addresses (by holding size) found a confluence of positive signs.
Here are some key points that he found from the data.
Key Takeaways From the Ethereum Wallet Analysis
- Whales Are Active and Growing: Cochran explained that Ethereum whales, the largest addresses in the space, have been accumulating coins during the recent downturn. “Existing whales have increased their position by more than 4% in the past six months,” he wrote, which reportedly amounts to $550 million worth of ETH purchased. This sum is important because this rivals “the roughly $600 million in new capital influx Bitcoin was estimated to see last year.”
- Ethereum Founder Vitalik Buterin Has Faith In His Project: Analysis of the reserves of Ethereum’s original founder, Vitalik Buterin, found that he sold a mere 26% of his original ETH holdings over the past five years, most of it “when ETH was low in price.” He donated 21% of his holdings to projects in the ecosystem. This persistent holding is a sign, Cochran explained, that “Vitalik believes in the vision of Ethereum isn’t here for a get rich quick scheme and puts his money where his mouth is.”
- Ether Is Being Used as Money: Contrary to what many Bitcoin maximalists may say, Cochran found that Ether is actually being used as a form of digital money. He found that 16.2 million coins are in “active” circulation, meaning these coins have been used in the past 90 days. This led him to the following conclusion: “When it comes to being money, ETH is used 440x more than Bitcoin for transacting.”
- Miners Are Hoarding Coins: As Ethereum 2.0 has neared, ETH miners have begun to hoard their coins, accumulating $230 million worth of the cryptocurrency in the past six months. He claims that this is a sign that miners are bullish on the future of the asset, especially in regards to staking.
- Institutions Are Buying Ether: Along with bona fide crypto whales buying Ethereum, Cochran found that “Big Players” — with him specifically cutting JP Morgan Chase, Reddit, Microsoft, Amazon, and other mainstream institutions — are “accumulating ETH.”
Ethereum 2.0 Could Accelerate Bullish Narratives
This is Cochran’s latest in-depth analysis of three Ethereum narratives. Previously, he examined how DAI could pose a true risk to the future of decentralized finance, and he analyzed how Ethereum 2.0 could create the “largest economic shift in society.”
Per previous reports from Blockonomi, he explained that the introduction of the blockchain upgrade is likely to cause a simultaneous supply shock and demand shock for Ether, pushing up prices at a rapid clip:
Ethereum 2.0 is the perfect combination of instant spikes, repetitive buying loops, competitive race conditions to drive up a short-term price, and just the right amount of background growth rate to catch that price before it falls, and offer a steady growing network thereafter.