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About: Investoom Weekly is the newsletter by the market intelligence company Investoom that provides AI-powered investment insights through social sentiment data, onchain data and financial data. Investoom democratizes the access to hedge fund insights.

Overview of the topics

• Crypto Highlight: In less than one month, Ethereum whales have acquired 3.5 million new ETH, corresponding to $4.55 billion.
• Financial Data: After the Merge of Ethereum, the market dominance of the Proof of Stake has increased by 20%.
• Social Data: From October 17, twitter users have typed the words “whales+ETH” more than 200 times per day.
• Onchain Data: Right after Ethereum, the holdings of the top 100 ETH whales are composed by USDC and USDT.
• Deep Dive: In August, the largest ETH whale, known as Naruto, went from a balance of $1.98 billion to more than $2.96 billion.

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Crypto Highlight

Ethereum whales gobble 3.5 million ETH

In less than one month, the holdings of Ethereum whales have strongly increased. From September 11, the 132 addresses containing at least one million ETH saw 3.5 million new acquisitions, corresponding to $4.55 billion. Thanks to their latest accumulation, the assets of ETH whales have grown more than 14%.

Concurrently, in the last few weeks there has been a market sell-off trend among Ethereum sharks and dolphins, investors that hold between 100.000 and one million ETH. However, the loose supply has been fully compensated by the large positions that the whales have taken, which permitted them to reach a total of 28.55 million ETH.

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Financial Data

The PoS has a market dominance of 34%

The redistribution trend started after September 15, when the blockchain of Ethereum migrated from a Proof of Work (PoW) to a Proof of Stake (PoS) consensus mechanism. This event, known as the Merge, should make the blockchain less energy-intensive, better for implementing scaling solutionsand more secure.

The Proof of Stake, whose market dominance has increased by 20% after the Merge, permit validators to lock up the assets in a smart contract as an attestation of good intensions. However, since the right to propose a block is randomly assigned, the storage of rewards of validators will be proportional to the share of staked tokens. What is the consequence? The large number of tokens held by honest actors will avert bad actors to have a high power.

For this reason, even if the majority of the blockchains are still based on the PoW consensus mechanism, the PoS has begun to be adopted for the transactions of 246 digital coins and has acquired a total volume of $253.36 billion. As we can imagine, the main contributor to the market cap is ETH, followed by the crypto used to pay transactions on the Binance exchange (BNB) and the widely traded Cardano (ADA).

Amongst the largest ones, there is also Polkadot (DOT), a next-generation blockchain project that promotes an heterogeneous multi-chain framework and tries to solve the problem of scalability and security. Avalanche (AVAX), the last one, is a blockchain platform in which users can support blockchain projects through smart contrasts, and is the main rival of Ethereum.

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Social Data

Are ETH whales manipulating prices?

The influence that Ethereum whales exercise on the token’s prices suggests that the largest investors are manipulating the ETH price with their exchange activity. According to a recent analysis, between 2020 and 2021 the market movements of ETH whales became suspicious.

Particularly, whales would have tried to raise ETH prices in order to sell their holdings at high levels. Thus, as the volumes of ETH exchanges increased the price rapidly rose, an unusual behavior for crypto markets. "When the exchange inflow mean increased, there was a short-term, long-term low”, an analyst of CryptoQuant pointed out.

The entrepreneur and angel investor Mario Nawfal isn’t the only one that is observing the movements of Ethereum whales and expecting a rise after the latest accumulation. On Twitter, from October 17 the combination of words “whales+ETH” has been used more than 200 times a day. In fact, after the announcement, ETH has been amongst the most used words.

With nearly 350 mentions, “crypto” was the most discussed topic of Twitter investors. Why? On Tuesday, Bitcoin was traded at $20,300, because risk-adverse investors were encouraged to buy BTC from big brands’ third-quarter earnings report. At the same time, ETH saw an increase of more than 11% in 4 days, exploiting the advantages of having a more energy-efficient PoS.

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Onchain Data

Top stacks of the largest ETH whales

Observing the top 10 assets held by the largest 100 ETH whales, Ethereum (ETH) accounts for the majority of their stacks. In fact, the average quantity held per whale is 16,423, which corresponds to $25,425,635.

Right after ETH there are USDC and USDT, the two main stablecoins of the crypto world, with an average amount held of $7,339,876 and $5,395,619. Under the podium we can find Staked Ether (stETH), the crypto token representing the equivalent amount of the ETH that has been staked, with $1,831,123 and followed right after by the crypto of the Locus Chain(LOCUS).

During 2022, however, the memecoin Shiba Inu (SHIB) has seen a slightly cutback. Indeed, even if at end of March they accounted for the 14.15% of the top whales’ portfolios, now they only build up the 5.28%. The trend could soon change, because at the end of the week crypto whales scoop up over $35 million in SHIB, signaling that there could be a bull season.

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Community

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News of the week

• Crypto scams: Web3 sees 15 new scam smart contracts an hour: Solidus Labs. [Read more]
• Ethereum: Crypto’s New Class of Kingpins Emerge After The Merge. [Read more]
• Twitter: Elon Musk completes $44bn Twitter takeover. [Read more]
• China: Hong Kong Plans to Legalize Retail Crypto Trading to Become Hub. [Read more]

Read the full version here.

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About

Investoom is a Munich-based Fintech Startup democratizing the access to quantitative investment insights that are used by big hedge funds, but are inaccessible to retail investors. We are a market intelligence company that provides AI-powered investment insights through social sentiment data, onchain data and financial data.

Disclaimer: The Investoom newsletter is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor before making any investment decisions. [Read more].

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