The crypto market is hot right now, and soaring coin prices are raising the stakes for new whale investors who aim to secure a piece of decentralized financing (DeFi) by buying ethereal (ETH), according to the blockchain analysis firm Chainalysis.
According to the latest analysis by Philip Gradwell, chief economist at Chainalysis, a lot of people are now entering the “crypto casino”, and this move could be sustainable longer, especially since the market has many more functional applications and of use. cases in 2017.
“I think the question now is when, and not if, [widespread digitization of assets] is coming, ”he wrote. Despite this, this should only happen after the current hype wanes, he concluded, adding that “if you’re not playing a very long game in crypto, you should probably be playing a very short game. “
Gradwell also argues that the recent build-up of ETH has been driven by “great new players who have brought a lot of assets to the casino”. According to Chainalysis data, 53.3 million ETH, or 46% of the total supply, is held in non-custodial wallets containing more than 10,000 ETH. Since November 2020, this group of whales has increased their holdings by 7 million ETH and are the main recent accumulators.
In addition, the fresh Ethereum whales that entered the market in the past six months have accumulated coins, increasing their total by 6.3 million ETH, while the longer-term whales that were active in 2017 and previously reduced their holdings by 800,000 ETH in the past six months.
Additionally, the buying pressure that drove ETH to $ 4,000 and above comes from DeFi, as around 10 million ETH has entered DeFi wallets since May 2020. These new Ethereum whales appear to be actively engaged in them. DeFi services. Nonetheless, Gradwell concluded that it is still too early to answer the question of whether they are playing the long game of adopting the technology or if they are just part of a short-term hype:
“To me, I feel like Fear Of Missing Out is setting in and sentiment is going to drive the market for a while. But will the scale of investment and interest advance technology and adoption enough to support prices, before the hype subsides and fear of missing out turns into fear, uncertainty and doubt? As always in crypto, that’s the question! “