A lot is happening on the blockchain every second. The amount of transactions getting processed on-chain is massive. Hence, developers create data analysis systems to make the data sensible. In the latest market scan, the balances of Ethereum miners have hit an all-new time high. As this happens, Crypto whales have been noticed moving around billions of dollars in ETH, notably to Arbitrum.
On-Chain Data Analysis
According to Santiment, an on-chain data analytics platform, the price of Ethereum hit $3480, which was its highest price in the last 15 days. Notably, the balances of miners on the Ethereum blockchain have also picked up in that span of time. They are now at an all-time high. Their previous high was in July of 2016.
Santiment shows that Ethereum miners’ largest balance was about 532k ETH in July 2016. They had held their balance steady at this amount up till recently when they started to accumulate.
Presently, the value of ETH held by Ethereum miners is $1.85 billion, marking an all-time high.
Why the Sudden Spike in Ethereum Miners Balances?
The incoming difficulty bomb update could also be the trigger of this sudden hoarding. This update has already been discussed at length before; however, there was not much reaction to it. The EIP-3354 update will increase the difficulty of mining Ethereum making it unprofitable to mine for miners.
Ethereum devs moved EIP-3354 to coincide with the end of Epoch 0 of the Beacon chain in December. This means that the difficulty bomb will hit as Ethereum fully transitions to Proof-of-Stake. All the blocks after the implementation of the update will not have any rewards. Hence, mining Ethereum will be totally unprofitable.
What Does This Mean for Ethereum?
This simply means that the Ethereum miners are hoarding ETH tokens instead of selling them on the market. Usually, when investors hold a crypto asset instead of selling it, it indicates they have confidence in it. Therefore, miners could be hoarding Ether in anticipation of a future supply shock. This all happens in the backdrop of analysts across the internet calling for a $5000 ETH in the near future.
Billions of Dollars in ETH Moved Across Wallets
Meanwhile, Whale Alert, another data tracking platform, has revealed massive ETH movements. According to Whale Alert, in total, the whales moved Ether worth over $2.2 billion. Binance exchange is one of the whales, while the rest are anonymous Ethereum wallets. Also, some of the ETH was moved to Arbitrum, a long-in-the-works layer-2 solution for Ethereum. This could mean the whales have some insider information about something big. Only time will tell.
Ethereum, the World Computer
Some might say Ethereum has grown too big to fail, and they would be correct to say that. Presently, Ethereum smart contracts are running the DeFi space and NFTs. There is no DeFi without Ethereum.
Ethereum (ETH) currently sits at $3,612 as Bitcoin pushes higher and breaks $55,000 resistance level. The second phase of the 2021 bull market has officially started and the two biggest cryptocurrencies are leading it.