Why has ETH been in a prolonged state of stagnation?
One perspective suggests that ETH's long-term stagnation is due to its transition phase.
Large financial institutions on Wall Street are gradually becoming the new market makers, taking over the so-called 'wild' chips from before. Over the past year, the market share of the top 100 ETH holding addresses has continuously increased, currently reaching 66%. This proportion has significantly increased, especially after the approval of ETH ETFs, indicating that the concentration of ETH is actually rising.
Top addresses have been purchasing ETH, yet its price has not risen. What does this mean?
On one hand, this indicates that the market makers are still active and continuously absorbing chips.
On the other hand, this also shows that there is a large-scale turnover of chips in the market, with not only retail investors selling their holdings but also internal turnover occurring between these top addresses, which is known as a market transition.
It is important to clarify that ETH and BTC are the only two tokens that have ETFs.
Moreover, compared to BTC, ETH has a significant advantage, which is staking rewards.
Once the ETF starts offering staking rewards or re-staking services, an annual risk-free yield of at least 3% in terms of the coin is extremely attractive, especially compared to traditional financial products.
This is the untapped potential of ETH and the biggest positive factor.
Naturally, traditional financial institutions will not overlook this tempting cake; they have a strong willingness and motivation to become the new market makers for ETH.
However, ETH has been a major narrative subject during the previous two bull and bear cycles, with a large number of long-term holders and a relatively dispersed chip distribution. Public account: Coin Old Say, avoid wastefulness.
Therefore, this process of chip turnover will take a considerable amount of time and require adequate market cleansing. Thus, it is necessary to suppress the price of ETH for an extended period to encourage the previous long-term holders to give up their chips, such as prompting them to transfer their funds to popular projects like SOL, so that the chips can be concentrated in the hands of the new market makers.
Only after the new market makers have accumulated enough chips will there be motivation to drive up the price of ETH.
This is undoubtedly a strategy laid out in the open.
Therefore, do not easily give up your truly valuable BTC and ETH holdings; only by enduring this long and torturous market cleansing phase can you reap the long-term returns you truly desire.
