Some Ether whales may have switched to Bitcoin in the past few months

Some Ether whales may have moved to Bitcoin in recent months - EthereumWhile the quotation ether (ETH) has increased by nearly 50% since the beginning of this year, the number of addresses holding large amounts of currency, known as whales, has decreased significantly.

The number of Ether whales has dropped by 6% in 2020 ...

The seven-day average of the number of addresses with at least 10.000 ETH declined to 1.050 on Tuesday. This is the lowest value since January 2019, according to data provided by the blockchain intelligence company Glassnode.

The number of whales dropped nearly 6% from the December high of 1.115. this calculation takes account of external ownership accounts or those controlled by private keys and excludes contract accounts that have their own code and are controlled by the code.

... while Bitcoin whales continue to increase

The drop in the number of ether whale addresses is at odds with the recent increase in the number of bitcoin whale addresses. The seven-day moving average of the number of addresses with 10.000 bitcoins or more rose to 111 in late April, the highest since August 2019.

"Some ETH whales may have moved to BTC in anticipation of the potential price hike of the main cryptocurrency due to the effects of halving the mining reward," said Connor Abendschein, a cryptographic research analyst at Digital Assets data.

This is further confirmed by the number of large BTC addresses which increased by 5% in March, while those of ether showed a downward trend.

Two assumptions about the decline in Ether whales

The trend may continue to increase because bitcoin is primarily used as a value storage tool, according to Jason Wu, CEO and co-founder of the Minneapolis-based digital loan platform

As a result, whales are more likely to store large amounts of bitcoin than ether, the main purpose of which is to facilitate, therefore monetize, the work done on Ethereum.

Another possible reason for the decline in major ether addresses could be investors' increased interest in the decentralized financial space (DeFi). “Address owners may have shifted a sizable portion of their smart contract holdings to various DeFi protocols that support lending, etc. to make more money, ”said Ashish Singhal, CEO and co-founder of the cryptocurrency exchange

Small Ether addresses grow rapidly

The decline in large addresses is also in stark contrast to the relentless increase in the number of addresses holding 32 or more ETHs. The seven-day average of total addresses containing 32 ETH or more stood at a record high of 114.625 on Wednesday, with a gain of over 4% this year.

"The growth could be attributed to the bullish sentiment around the implementation of Eth 2.0," Singhal said. This is because an address with a minimum balance of 32 ETH is required to be a validator in the imminent transition from the proof-of-work (PoW) system to the proof-of-stake (PoS) of Ethereum 2.0.