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One-third of the world’s Ether is owned by only 376 people: Chainalysis

Fri, 17 May 2019, 02:19 am UTC

One-third of the ether, the native cryptocurrency of the Ethereum blockchain, in the world is owned by only 376 people, a study conducted by Chainalysis found.

The research released on Wednesday revealed that these Ether whales, described as those who have out-sized cryptocurrency stakes, hold 33% of the circulating supply in 2019. Surprisingly though, this number is actually lower compared with the 47% level and nearly 40% in 2016 and 2017, respectively.

The cryptocurrency compliance and investigation solutions provider also looked at the effect these cryptocurrency whales have on the prices of Ether. It revealed that they actually have “no meaningful impact,” although they contribute to price volatility. In fact, Ether whales account only 7% of all economic transaction activities.

It also found that more than half (~60%) of these whales are not active traders. Between 25% and 40% of the circulating Ether supply are held by these whales; however, their economic transaction volume only stands between 5% to 18%.

Using a vector regression model, Chainalysis found that Ether prices follow Bitcoin prices. An average 1% Bitcoin price increase yesterday can result in a 1.1% Ether price increase today.

Also, funds sent impact volatility but not price. For instance, if a whale sends $1 million worth of Ether 2 days ago, it can lead to a 0.1 unit intraday volatility increase today. Considering that intraday volatility usually ranges between 0.02 and 417, the number is small.

As for the funds received by whales from exchanges, they do not impact both the Ether price and intraday volatility.

“These preliminary findings are consistent with the literature on stock market prices and volatility,” the report stated. “Academics have found that large anomalous fluctuations in traded volumes of particular stocks, notably the S&P 500, tend to impact volatility and not price levels.”

Based on Chainalysis’ research, whales are the top 500 cryptocurrency holders. Services, who store their holding off exchanges, are not included.

Meanwhile, Chainalysis rolled out four more cryptocurrencies to its real-time transaction monitoring tool last month. It now supports Binance Coin, Gemini Dollar, Tether, and USD Coin.

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