Bitcoin investors are cashing out, while Ethereum holders continue to accumulate
Long-term Bitcoin holders have begun to sell their holdings that they accumulated during the bear market in January, when spot Bitcoin exchange-traded funds (ETFs) were launched in the U.S. However, long-term Ethereum holders are continuing to accumulate. The behavior of long-term holders is critical to understanding market cycles, as historical data shows that this profit-taking behavior usually starts in the early stages of a bull market and continues beyond the peak of the cycle. Due to Bitcoin's influence in the cryptocurrency space, it is often the most direct asset used to measure these cycles, as other digital assets tend to follow the leading trends of the flagship cryptocurrency. However, it is worth noting that long-term Ethereum holders are still accumulating new tokens at this time, which is in stark contrast to their behavior in the previous cycle, when they behaved very similarly to Bitcoin holders. This deviation from the traditional pattern may be due to the emergence of attractive income opportunities within the Ethereum ecosystem. Unlike Bitcoin, Ethereum offers a staking mechanism that allows holders to earn passive income on their holdings, and there are other income strategies within the decentralized finance space. Currently 27.5% of the total ETH supply is staked, and the potential approval of a spot-traded Ethereum ETF may be another factor influencing the behavior of long-term holders. These investors may be waiting for this regulatory milestone and a potential surge in prices to all-time highs before considering selling their ETH. Last month, the SEC approved applications from major stock exchanges to list spot Ether ETFs, paving the way for these products to begin trading later this year. This marks a major shift for the SEC, which has historically been cautious about cryptocurrencies and has been investigating whether to consider the second-largest cryptocurrency a commodity or security. It is worth noting that more than 83% of ETH holders are currently in profit, and the asset may see an uptick as more catalysts arrive. While more than 89% of BTC holders are currently in profit, investors holding the cryptocurrency appear to be more bearish.
