With uncertainty on a global scale reaching critical levels, cryptocurrency markets are torn between hope and angst as the correlation between traditional markets and cryptocurrencies was particularly high in 2022. Diving into key indicators from a long-term perspective, could provide a possible bullish scenario for Ethereum.
Regardless of recent price action, Ethereum holders continue to rise.
ETH address statistics. Source: IntoTheBlock
diving into growth
Ethereum holders are starting to resemble the behavior of those in Bitcoin.
Ethereum became the first network to surpass 70 million addresses with balance. While it is true that one person can have multiple addresses, we have to take into account exchanges that hold the funds of multiple users. This is the closest approximation to measuring the number of holders of a crypto asset.
As Ethereum has reached 70 million holders, it is important to account for how quickly this happens. In 2021 alone, with the adoption of DeFi protocols and the explosive growth of NFTs, Ethereum added a total of 18.36 million new addresses with balance.
This means that the network was growing at a rate of 1.53 million new subscribers per month. And just like in 2021, in 2020 we saw a similar increase. 15.95 new addresses with balance were added to the network.
Compared to Bitcoin
What is even more interesting is that the number of addresses in profit state on Ethereum is greater than the total number of holders on Bitcoin.
Global In/Our of the Money. Source: IntoTheBlock
IntoTheBlock’s Global In/Out of the Money (GIOM) ranks addresses based on whether they are profitable (at the money), tied (at the money) or losing money (out of the money) at their current price positions.
At the current price, about 70% of the addresses with ETH (51.39 million addresses) are in a profit or “in the money” state. This number is 30% higher than the total number of Holders in Bitcoin (39.49 million addresses).
Thus, we have established that the Ethereum network has been growing rapidly and with a strong foundation in the profitability of holders, even though the Baselayer (L1) platforms for decentralized applications (dapps) have registered remarkable growth in 2021, both in terms of the use of their blockchains. and in price appreciation of their native tokens.
An important factor to consider is how Ethereum is evolving into a Bitcoin-like pattern as a “store of value”. Looking at the blockchain data, we can look at the activity of holders to examine how they are positioned in light of recent volatility. Long-term investors (“hodlers”) who have held for more than 1 year are still not eager to sell, even after recent lows.
Balance by Time Accomplished. Source: IntoTheBlock
Regardless of recent price action, long-term investors remain unfazed and are exhibiting a clear pattern of accumulation.
The chart above shows how long-term investors tend to decrease their positions when the price approaches new highs and accumulate when it is lower. Since January, the balance held by these holders has increased considerably, adding a total of 3 million ETH to their holdings.
The above analysis was compiled for CryptoPotato by IntoTheBlock.
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