This Ethereum Metric Has Sparked Centralization Concerns Over ETH Ownership
August 26 2023 - 9:00AM
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Crypto blockchains are designed to be fully decentralized so that
no single person or group has control. However, new data has shown
that the top 10 Ethereum addresses control over 35% of the total
ETH supply. For a network that was designed to be decentralized,
this has sparked some serious concerns over how centralized ETH has
become. The 10 Largest Ethereum Addresses Hold Over 35% Of
The Available Supply While sharing the metric on social media
platform X, crypto market intelligence platform Santiment showed
how holdings of the 10 largest Ethereum addresses have now climbed
to 35% of the total supply. Related Reading: Shiba Inu Whale Buys
708 Billion SHIB, Sparks Speculation Of Price Recovery This
indicates that while small traders have been trying to offload
their supply during the recent price crash, many ETH whales are
taking the chance to buy the dip. 🐳 The 10 largest addresses
on the #Ethereum network are now holding over 35% of the available
supply. By no means does this mean the #2 asset in #crypto is
suddenly #centralized, but it shows the capitulation of smaller
traders showing #FUD from this dip. https://t.co/G3wIeBzelb
pic.twitter.com/TXkKjSwwmn — Santiment (@santimentfeed) August 25,
2023 Over the past 5 years, the top 10 largest Ethereum addresses
have seen their share of the total ETH supply grow substantially.
Data shows that these addresses held only 11.2% of the total supply
in August 2018, and then rose to 24% in August 2022. The current
level means these 10 largest holders have accumulated 11% more in
the past year. 📈 #Ethereum has been seeing its top 10 addresses
expand and accumulate more and more of the total available coin
supply. In 5 years, the top 10 largest addresses have gone from
owning 11.2% to now 34.6% of $ETH. The 27.86M $ETH added is worth
$51.6B. 😮 https://t.co/utI8W6DkRX pic.twitter.com/klgb7pus7K —
Santiment (@santimentfeed) August 9, 2023 Etherscan, an Ethereum
block explorer, shows the top account balances in ETH, with the
largest address alone (Beacon Deposit Contract) controlling over
24% of all supply. Next comes in Wrapped Ether at 2.7%.
However, most of the largest ETH holders are cryptocurrency
exchanges like Binance and Kraken. One of Binance’s wallets
(Binance 7) holds over 1.66%, while the exchange also holds large
ETH amounts in other wallets, making it the largest of any single
entity. In comparison, the top 10 addresses of Bitcoin, the
largest crypto in the world, own only 5.35% of the total supply.
This, of course, does not take into account Satoshi Nakamoto’s
Bitcoin cache. ETH price struggles amid centralization
concerns | Source: ETHUSD on Tradingview.com ETH
Centralization Concerns? Whales are known to have considerable
control over the price movement of cryptocurrencies in the crypto
market and large selloffs by these holders can lead to an increase
in selling pressure from smaller investors, causing a dump in the
price of ETH. However, considering the largest holder is the
Ethereum is the Beacon Deposit Contract used for staking ETH, an
increase in the contract spells positive news. More deposits into
the contract signal that more investors are depositing to become
validators in ETH 2.0. Related Reading: MasterCard Axes Partnership
With Binance Amid Regulatory Pressures Interestingly, the number of
wallets holding between 10 and 10,000 ETH has risen to 355,000, and
1,788 more 10-10,000 ETH wallets have been added since the
beginning of June. Whale transactions in the past week alone have
also crossed 23,073 ETH, the highest since May. As for ETH’s price,
the token is currently trading at around $1,600, down 11% in the
past month. Featured image from iStock, chart from Tradingview.com
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