According to Chainalysis, blockchain analytics firm Chainalysis, the crypto market is hot and climbing coin prices are increasing the stakes for new whale investor who want to buy ethereum (ETH) to gain a piece decentralized finance (DeFi).
The latest analysis of Philip Gradwell, Chief Economics Officer at Chainalysis shows that a lot more people are entering the “crypto casino” and could last longer, particularly considering the fact that there are significantly more functional applications and use cases in 2017 than 2017.
He wrote that “It is now a matter of when, and not if” widespread digitization of assets will occur. He said that it should happen only after current hype has subsided.
Gradwell also argues the recent ETH accumulation was driven by “big new player” who brought a lot to the casino. According to Chainalysis data, ETH 53.3m or 46% of total supply is held in wallets other than custodial that have more than ETH 10,000. This group of whales has been the major accumulators since November 2020. They have increased their holdings by ETH7m.
New Ethereum whales have accumulated coins over the past six months, increasing their total holdings to ETH 6.3m. Long-term whales active in 2017 or earlier, have seen their holdings decrease by ETH 800,000.
DeFi is also responsible for the buying pressure that drove ETH up to USD 4,000 and higher. DeFi has received approximately ETH 10m since May 2020. These new Ethereum whales appear to be actively involved in DeFi services. Gradwell said that it was too early to know if these new Ethereum whales are actually playing the long-game of technology adoption, or if they are just participating in short-term hype.
“It feels like Fear Of Missing Out has taken hold, and sentiment will drive the market for a while. Will the interest and investment in technology be enough to support prices? Before Fear Of Missing Out becomes Fear Uncertainty or Doubt, and hype fades? That is the question, as always in crypto.