Smaller ETH Holders Growing Faster than Bitcoin as it Captures Retail Interest

While both the top cryptocurrencies are down 27% to 28.5% from their respective all-time highs, Bitcoin and Ethereum continue to attract the attention of smaller investors.

This can be seen in the number of BTC and ETH addresses in terms of relatively small holdings that have been rising throughout this year.

The total number of Bitcoin addresses holding between 0.001 and 0.1 BTC has increased by about 15% so far this year. But since the end of April, they have been somewhat flat.

As for the number of Ether addresses holding between 0.01 to 1 ETH, they are up roughly 58% year-to-date and, unlike Bitcoin, continued to steadily increase throughout the summer as well, thanks to the raging NFT summer.

“It is possible that retail interest in NFTs is helping Ethereum adopt new users,” noted Coin Metrics.

We went from corporations buying Bitcoin to corporations actually using Ethereum in just one year.

Things will only get weirder from here. The cats out of the bag. https://t.co/vTJcPvPyiE

— Ryan Watkins (@RyanWatkins_) August 25, 2021

The growing number of Ether locked in DeFi, and ETH 2.0, along with being moved out of circulation through burns, are also helping attract investors.

Ever since the EIP-1559, daily net ETH issuance has actually fallen to averaging near 9.5K, from an average ~13K over the week preceding the London upgrade.

This 27% decrease in the amount of ETH minted every day has been due to the new base fee being burnt. Since the activation of EIP 1559 on August 5, more than 91,000 ETH has been burned to date.

Also, OpenSea, Uniswap v2, and Axie Infinity’s bridge contract, Tether, and Uniswap v3 are the top 5 smart contracts responsible for burning the most ETH.

NFT marketplace OpenSea alone is responsible for over 12k ETH burned so far and is leading Uniswap v2 (~6,300 ETH) by a sizable margin.

“Most Ethereum gas spikes also happen due to NFT minting or PFP launches. This leaves little doubt that the current NFT / Gaming cultural hype cycle contributes heavily to ETH burns,” notes Messari.

The percentage of transactions on Ethereum using the EIP-1559 fee mechanism has also been increasing as service providers catch up in supporting the new format. MetaMask’s rollout of EIP-1559 support to its users early last week pumped the daily percentage of transactions using EIP-1559 to over 40% on August 22, from ~23%.