Ethereum Whales and Sharks on the Rise: What Does This Mean for the Crypto Market?

Ethereum has seen an increase in the number of “whales” and “sharks” holding significant amounts of the cryptocurrency. According to Santiment, there are now 380 more addresses holding 1,000 or more ETH compared to last year, a 5.7% increase.

The rise in the number of whales and sharks, which are terms used to describe those who hold significant amounts of a particular cryptocurrency, has been aided by a 34.8% drop in the price of Ethereum over the past year. The lower prices have made it easier for these investors to accumulate more of the digital currency.

Source: Santiment

Santiment’s data also revealed that Ether quarterly futures are popular among these large investors and arbitrage desks. However, these futures contracts typically trade at a slight premium to spot markets, indicating that sellers are asking for more money to delay settlement.

While futures contracts in healthy markets should trade at a 5% to 10% annualized premium, a situation known as contango, this is not currently the case for Ethereum. The Ether futures premium has worsened from its recent peak of 4.7% on April 1 to its current 1.8% level. This suggests that buyers are avoiding leveraged longs and that there is a moderate demand for short (bear) positions using futures contracts.

Ether traders have also been cautious in recent weeks, with no surge in demand for leveraged longs even after the digital currency’s breakout above $2,100 on April 14. The market’s cautious approach is likely due to a combination of factors, including uncertainty surrounding the broader cryptocurrency market, regulatory concerns, and general market volatility.

The annualized premium of Ether futures with a 3-month maturity, according to Laevitas.

Despite these challenges, Ethereum remains a popular cryptocurrency with a strong community of developers and users. Its underlying technology, which enables decentralized applications (dApps) to be built on top of the blockchain, has the potential to revolutionize many industries. However, the recent increase in the number of Ethereum whales and sharks, as well as the cautious approach of traders, highlights the challenges facing the cryptocurrency market as it continues to mature.

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