Newest Chainalysis Research Shows Under 400 Individuals Hold a Third of all Ether (ETH) in Existence
New research by Chainalysis indicates that a third of all ether (ETH) , Ethereum’s native crypto is owned by only 376 big whales as of May 1, 2019. The latest discovery was made public on Wednesday through the publication of a report by blockchain analysis startup Chainalysis’ team of experts.
The report by the blockchain analysis firm indicates that, while all 376 individuals control 33% of the circulating supply in 2019, that number is actually down from what was witnessed in 2016 and 2017.
Although these whales have no substantial impact on the price of ETH, they do increase intraday volatility in the cryptocurrency market if and when they decide to make large sell-offs.
The definition of Whales, according to Chainalysis are the top 500 Individuals who hold cryptocurrency, excluding services and who store their holdings off exchanges. The report also found out that these crypto demi-gods currently account for just 17% of all transactional activity in the cryptocurrency market.
Furthermore, the reports revealed that around 60% of these whales are not active cryptocurrency traders, this means that most of them are just holding their assets and are not regularly trading on cryptocurrency exchanges.
Consequently, this implies that they consistently hold around 25-40 percent of the circulating supply of ETH and are only able to account for just 5-18% of transactional volume. Using the vector autoregression (VAR) model, which is often used in financial times series analysis, Chainalysis realized that the prices of ETH follow BTC prices.
This implies that, on average, a 1 percent increase in BTC price yesterday will ultimately lead to a 1,1 percent increase in the price of ETH today. Although, the study was not able to find a ‘’statistically significant’’ impact of BTC prices on that of the ETH’s intraday volatility.
Impact On Volatility
The Chainalysis report also examined the impacts of whales sending and receiving funds to and from exchanges using a VAR model. The study realized that the funds sent affects volatility but not the price, while the funds received have not direct impact either on the prices or on the intraday volatility.
The report states thus:
‘’ These preliminary findings are consistent with the literature on stock market prices and volatility. Academics have found that large anomalous fluctuations in traded volumes of particular stocks, notably the S&P 500, tend to impact volatility and not price levels’’ it concluded.
The activities of the whales storing cryptocurrencies are not peculiar to ETH, as Bitcoin Exchange guide reported in April 2019, of the activities of investors storing cryptocurrencies in preparation for the next bull run in the cryptocurrency market.
The report indicated that there are some notable bitcoin cash (BCH) investors that accumulated over 1.1 million BCH in over a month. Most of these investors store the digital currencies in anticipation of a radical rise or fall in the prices of the virtual currencies.
Although the hodling of these cryptos might not generally affect the prices, they definitely affect the number of cryptocurrency in circulation.
Live Ethereum (ETH) Price:
1 ETH/USD =$3,688.4190 change ~ -8.87%