The concentration of over 50% of ETH’s supply in a small pool of wallets could pose key risks to Ethereum’s decentralization.

Ethereum Whales Hit Highest Holding Ever

Ethereum’s (ETH) surge to $4,000 has rekindled interest in the second largest cryptocurrency by market cap. With BTC setting new all-time highs, ETH could be next as the current price is just a few hundreds of dollars away from its all-time high of $4,872.

Despite these prospects, a recent analysis by Santiment, a blockchain analytics platform has brought to light the concentration of a significant amount of ETH supply in just a little over 100 ETH addresses.

According to the analysis, 104 Ethereum addresses collectively hold an astonishing 57.35% of the total supply of ETH. These addresses commonly referred to as “whales” hold at least 100,000 ETH with a combined holdings of 83.81 million ether worth approximately $333 billion. This is the highest holding of all-time for these group of ETH whales.

The analysis further shows that wallets with 100 to 99,999 ETH currently hold 33.46% of ETH’s total supply which is their lowest supply ratio since ETH’s existence. In similar manner, wallets with less than 100 ETH hold just 9.19% of supply, amounting to a 4-year low for this category of holders.

The significant concentration of ETH holding in whale wallets raises important questions about the implications for the Ethereum network, its decentralization, and the ability of these wallets to cause significant price drops in the event of a sell-off or hack. With Ethereum currently on a proof-of-stake model, the influence of these whales could extend to governance decisions and staking rewards.

On the flip side, Ethereum is largely dominated by decentralized finance (defi) protocols and staking wallets, so this could be regarded as a bullish long-term accumulation signal by the token’s key holders.

This concentration of supply in a small number of whale wallets will likely remain a topic of discussion with investors and on-chain trackers paying keen attention to ETH movements by these wallets.
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