Analysis: 80% Of ETH in Externally Owned Accounts in Profit Ahead of Ethereum 2.0 Launch
Although Ethereum’s price is trading significantly lower than its 2018 highs, nearly 80% of the asset supply is in profit, new data revealed. It’s calculated by comparing ETH’s price at the moment with its position when it last moved on-chain, and it applies only to Ethereum held in externally owned accounts (EOAs).
80% Of ETH Supply In Profit
Information provided by Glassnode recently informed that “the percent of ETH supply in profit is hovering at 80%.” This is only the third time the percentage has increased to this particular level in the past two years.
The price of the second-seeded cryptocurrency by market cap reached its ATH in January 2018 at over $1,400. Since then, however, ETH has decreased substantially and even dipped below $100 on a few occasions. As such, Glassnode concluded that “last time the Etereum’s supply in profit was significantly above 80%, ETH was priced at around $700.”
Naturally, price drops allow investors to accumulate more at lower levels, which ultimately decreases the average percentage of the supply in profit. Hence, after each dip, Ethereum’s price has to increase less than the previous one so that the supply in profit could hover around the 80% mark.
For example, in late June 2019, when it reached 80%, ETH traded at $360. Now, even though the price has decreased by 32% and is currently at $240, but the percentage of supply in profit is again at 80.
Demand For ETH Increases
Numerous recent reports imply that the interest in the largest altcoin has been growing. Firstly, data surveying the top 100 Ether wallet addresses indicated that they had begun accumulating higher percentages of the token’s total supply.
The number of non-zero Ethereum addresses has also surged by over 350% since the asset price peaked in 2018.
Another report noted that investors and even miners, who are generally incentivized to sell their portions to cover their costs, are holding ETH. By adding recent developments from the network and the anticipated Ethereum 2.0, the report concluded that the price of Ether is “significantly undervalued.”
Aside from the retail interest, institutional investors are also gearing up ETH accumulation. The leading digital asset management company Grayscale Investments had purchased nearly 50% of all mined ethers in 2020 to cope with the demand of its clients. Institutional investors buying through Grayscale didn’t even mind paying a significant premium of over 400%.
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