Massive on-chain Ethereum accumulation suggests firm prices ahead

Major holders of Ethereum are taking their tokens out of exchanges and putting them into private wallets at a rapid pace. This movement out of exchanges is happening at a time when Ethereum prices are relatively high, at least on a post-2018 basis. Leading crypto research firm Santiment has confirmed these market trends, and also stated that many of the accounts are held by large investors, sometimes known as 'whales'. Grayscale Investments, a crypto investment firm, has received a record amount of investments in 2020, and now holds 2% of the Ethereum available on the market.

Accordng to Santiment,

“$ETH’s top 10 whale exchange addresses have continued swapping their funds to non-exchange wallets, & moving holdings at an impressive rate. The 20.5% decrease in tokens on exchanges the past 2 months indicates price confidence by top #Ethereum holders.”

Why it matters: There is clearly a shift happening in the crypto space. More institutional investors are entering the market, and this may explain part of the move towards longer-term holdings. If cryptos are becoming an asset class that is attractive to larger investors, there is likely going to be a substantial repricing of the sector on the upside. In addition to being positive for market psychology, more long-term holders effectively remove supply from the market, which could turn moderate buying into a big move up in prices. While there will always be selling in any market, 2020 may mark the time when the major tokens entered the mainstream.