Ethereum supply dries up: whales buy for hundreds of millions

The crypto market was under a lot of pressure this week, but major investors are seizing their opportunity now. On-chain data shows that so-called whales have once again purchased Ethereum (ETH) en masse. Especially with the recent price dip, hundreds of millions of ETH were added to large wallets.

Whale activity on Ethereum is increasing

According to data from blockchain tracker Onchain Lens, a new wallet address recently obtained 10,009 Ethereum, worth about $41 million, from Binance.

That purchase is not an isolated event. Blockchain analytics platform LookOnChain reported that another new wallet, possibly connected to Tom Lee’s company BitMine, bought another 26,199 ETH through FalconX, worth about $108 million.

BitMine already had more than 3 million Ethereum in cash, making it by far the largest public holder of ETH. So they are now adding more than 100,000 coins to that. Founder Tom Lee’s goal remains to eventually own 5 percent of all ETH.

Ethereum spot ETFs are making a comeback

In addition, we also see that inflows into the American Ethereum spot exchange-traded funds (ETFs) are coming back to life, according to data from Farside. After a significant outflow on Monday, of no less than 428.5 million dollars, we are now seeing net inflows. Over the past two days, this amounts to a total of $405.8 million.

A significant portion of these investments come from institutional investors. For example, ETF expert James Seyffart indicates that for Bitcoin (BTC) spot ETFs, approximately 25 percent of the inflow comes from these parties.

The significant purchases by institutional investors are an important signal, because these parties usually invest with a long-term vision. Public Ethereum reserve companies such as BitMine also buy their tokens to hold them for the long term. This contributes to a drying up supply of ETH on the market.

Analyst Crypto Gucci therefore speaks of a historically unique situation, in which “three supply vacuums occur simultaneously”. For example, enormous amounts of ETH are currently being staked on the network. These tokens are used to validate transactions and cannot simply be withdrawn. Unstaking can take weeks, making these coins less liquid. In total, approximately 35.7 million ETH, or 30 percent of the total supply, is locked in staking contracts.