A new report by Chainalysis is in the latest cryptocurrency news, indicating that a third of all Ether (ETH) is owned by just 376 whales as of May 1 this year. The blockchain analysis startup Chainalysis has published a study on Ethereum possession, indicating that a third of ETH is controlled by 376 individuals.
What’s also interesting is that this number is actually down from the 2016 and 2017 levels, meaning that the Ethereum possession is declining in terms of the number of users holding the cryptocurrency.
The study by Chainalysis is in the altcoin news today – finding that these whales have “no meaningful” impact on the ETH price despite controlling a third of it. However, they have the ability to increase the intraday volatility in the crypto market with the large sell-offs, mainly due to their big Ethereum possession.
According to Chainalysis, whales are the top 500 holders of cryptocurrency (excluding services) who store their holdings off exchanges. Ether whales, as the coming altcoin news show, currently account for just 7% of all transaction activity.
The study also found that the majority of whales with Ethereum possession are not active traders – but instead hold their assets and are not regularly trading on cryptocurrency exchanges. In other words, this means that these whales ar consistently holding 25% to 40% of the supply as their Ethereum possession and account for only 5% to 18% of the transaction volume, as Chainalysis said.
By using a vector autoregression (VAR) model, which is commonly used in financial time series analysis, Chainalysis found that the Ethereum possession and prices follow Bitcoin (BTC) prices. On average, a 1% increase in BTC leads to a 1.1% increase in the ETH prices, which is something many best cryptocurrency news sites found interesting and worth reporting.
Besides the Ethereum possession, this study also analyzed the impact of whales sending and receiving funds to and from exchanges using the VAR model. It found that funds sent do impact the volatility but not the price – while the funds received have no impact on prices or intraday volatility.
“These preliminary findings are consistent with the literature on stock market prices and volatility,” the report on Ethereum possession concluded. “Academics have found that large anomalous fluctuations in traded volumes of particular stocks, notably the S&P 500, tend to impact volatility and not price levels.”
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Stefan has been writing articles for DCForecasts since 2016 in-house full time. As one of our main cryptocurrency writers, he focuses on covering the latest cryptocurrency news, technical charts, price analyses of coins and press releases. When he is not exploring and covering the latest topics in crypto, you can find Stefan playing basketball, tennis or cycling.
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