2020 has been a good year for Ethereum so far, with the token halving gained 92.39% since the start of the year. Most crypto analysts and commentators are all bullish about the world’s second-largest cryptocurrency, mainly because of the highly anticipated transition to Ethereum 2.0 from the existing Proof-of-Work consensus to Proof-of-Stake.
When Ethereum finally moves on to a fully PoS based system, the current inflation rate of 5% or more would be eradicated. According to the developers, the new system would further stabilize the blockchain and reduce the annual inflation rate to just 0.22 %.
Investor confidence on the rise
This could also be the reason that’s motivating whales to accumulate Ethereum as recent reports reveal that the top 100 Ethereum wallets are starting to stack up ETH. The event was noted by blockchain data analysis firm Santiment. The firm tweeted that the accumulation of ETH within the top wallets are signs of whale movement.
Ethereum’s steady drop from its yearly highs has done significant damage to its market structure, with bull’s inability to sustain its momentum, seemingly elucidating some underlying weakness. However, the cryptocurrency consolidated at $225, and since then, the token has risen roughly 6% currently trading just below $238.
As the top 100 wallets have totaled to account for 25% of total Ethereum in circulation, investor confidence on the world’s second-largest cryptocurrency might be on the rise. Santiment wrote:
“The top 100 holders of Ethereum are once again beginning to accumulate higher percentages of the total token supply, despite the ongoing consolidation that has been occurring for the past couple of weeks.”
According to Santiment, these patterns are indications of a potential price upside for the digital asset, even though it might take some time before the upward rally gains traction. The tweet further reads:
“Generally, when this kind of accumulation starts to mount, it’s a signal that those who have the most stake in ETH (and other respective tokens) are beginning to have a collective sentiment of the token being undervalued and believe it’s a high mid to long-term hold play.”
“Sometimes these price rises take a bit of time after this accumulation rises. Still, it is generally a good sign for Ethereum bulls.”
However, it must also be noted that the top 100 wallets consist of a variety of investors. Among the lot, 20 of the largest wallets are owned by various exchanges. As per data from TokenAnalyst, the wallets of Huobi, Binance, Bitfinex, Poloniex, Okex, Gemini, Kucoin, Bitstamp, Kraken, and Bittrex amount to roughly 18.5 million ETH, which is equivalent to 16.8% of Ethereum’s total supply.
ETH looks bullish
Overall, the market sentiment looks bullish for Ethereum. Other than the anticipation for ETH 2.0, the decentralized finance (DeFi) sector has also seen massive growth as it touched a record high of $1.219 billion on February 15, according to DefiPulse. DeFi giants like MakerDAO and most popular protocols are mostly based on Ethereum’s blockchain. The number of ethers locked in DeFi has also risen from 1.912 million on January 1, 2019, to 2.8 million this week.
Furthermore, the upcoming Bitcoin halving is also expected to fuel a 2020 bull run, and investors are preparing in anticipation of that. Previous bitcoin rallies have all seen ETH prices getting a boost.
