Over the month when Ethereum kept going up, rallying by over 86%, everyone assumed that all the ETH was stored within investors’ wallets. The reality is a little different though. For a long time, it was mostly whales taking up the charge of buying huge amounts of ETH and holding them. This time around, even that is not the case. So the question is…
Where is all the Ethereum going?
The first instance of this observation came from the fact that exchanges’ position has changed from selling to buying again. And, on no small scale either. Volumes of ETH exiting exchanges have been ranging from $100 million yesterday to over $1.6 billion today. Such kinds of volumes, as mentioned, would make sense for whales. Except for this time, it is mostly investors making these moves.
Ethereum exchange net position | Source: Glassnode – AMBCrypto
That inference comes from the fact that participation has increased considerably as new addresses have been rising. Since August, this number has surged by 8k. As participation increased, so did buying. What’s more, addresses with balances just touched an all-time high of 60 million addresses.
However, investors have made sure not to let all that ETH sit in their wallets alone. They are diversifying their ETH investments.
Ethereum number of addresses with balance | Source: Glassnode
Where else has ETH gone?
Into DeFi protocols, and in no small quantity either. If you look at the total value locked in DeFi protocols across the Ethereum network, the value has risen by a mile. Up by $62 billion, with the TVL touching $157 billion. This is proof of just how much DeFi is expanding as Etheruem remains the highest value locked blockchain.
Ethereum TVL in DeFi | Source: Glassnode – AMBCrypto
In addition to this, a majority of ETH has also been deposited into ETH 2.0 deposit contracts. The metric touched a new all-time high of $23 billion. Even so, despite all the investments, ETH in itself has taken a hit as well.
Since the implementation of the fee burn mechanism of EIP 1559, over 7000 ETH has been burnt. Circulating supply has come down due to the same from 117,219k to 117,212k. Ethereum’s no total supply cap helps balance this fee burn, but the 18 million ETH minting cap can be cause for concern.
Ethereum 2.0 deposit contracts | Source: Glassnode
