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This week, observers caught wind of a stark contrast between large holders of the two top cryptocurrencies on the market–highlighting a seemingly opposite sentiment among whales in Bitcoin and Ethereum. According to on-chain analysis firm Glassnode, Ethereum whales that hold 1,000 or more ETH (worth roughly $1.5 million) have been in a sharp downtrend since 2020, with $20 million ETH being sold off.
On the other hand, Bitcoin whales have been quietly accumulating. Those holding 1,000 or more BTC (roughly $26.9 million) have remained mostly flat over the same time period—albeit with a couple of sharp drops, perhaps due to the FTX collapse or profit-taking after a successful 2021 bull run.
The apparent disparity in activity by whales led to a flurry of theories shared across social media, with prominent figures in the Bitcoin aisle seizing the chance to fire shots at its Ethereum community counterparts.
Steven Lubka, head of private client services for Bitcoin financial services Swan, told Decrypt that his company has seen a large number of high-net-worth individuals (HNWI) looking to offload their ETH for BTC. He pointed, above all, to the legal concerns surrounding the industry.
“Ethereum is under regulatory pressure, whereas Bitcoin is not,” he said.
“Bitcoin provides a simple function: better money,” Shrader said. On the other hand, “while Ethereum provides a bounty of enthralling complexity, it risks losing the plot to smart contracts and critical hard fork protocol changes.”
But the Glassnode data, and the conclusions drawn, seem incomplete.
“Does the chart correctly adjust for staking?” asks Kunal Goel, senior research analyst for Messari. He explained to Decrypt that “transfers to a staking contract might look like selling on chain but is not really selling at all.”
At present, staking in the Ethereum network requires users to lock (or pledge) a 32 ETH in a smart contract in order to help the blockchain validate transactions. This appears to be driving the alleged drop in holdings by large entities.
Goel added that although the large difference in dollar amounts between large holders does not disqualify whales from being compared, “the data needs to be correct.”
André Dragosch, head of research for Deutsche Digital Assets (DDA), a crypto asset manager, echoed Goel’s views. He called the ETH whale-selling drama a “nothing burger,” noting that the percentage supply of ETH in smart contracts has been increasing “concordantly.”
He highlighted on Twitter that Glassnode does not include Ether tied in smart contracts to the previously mentioned whale supply metric. In fact, Dragosch added, the percentage of ETH supply held by the top 1% of addresses has not declined at all.
The numbers might seem to say one thing at first glance, but tell a different story: Bitcoin and Ethereum whales continue to be bullish.