Over the last 30 days, Ether fell by 60%, worse than all the top ten cryptocurrencies—exception EOS, which, over the same time, lost about 70% in price.
While the whole market is experiencing hard times, and Ether has already been bid farewell by the meme “Ethertime ends,” it is easy to sow FUD with news about the movement of large sums and that the developers themselves are allegedly withdrawing Ether, having become disillusioned with this cryptocurrency. DeCenter figured out where the frightening amounts of Ether are actually flowing and whether it is worth FUDing over it (spoiler: it is not).
FUD or Not?
In late November, there were rumors that the developers of Ethereum were transferring funds for sale. But in reality, things turned out to be a little more confusing.
The wallet that received 380,000 ETH during the pre-sale of Ether (credited at the launch of the network on July 30, 2015) carried out two major transactions (November 2 and 19), which, in total, amounted to 380,000.04115819 ETH. Thus, the whale actually emptied the wallet, withdrawing from there the first 380,000 ETH and the additional amount accrued during the next couple of small transactions. The recipient of both transactions was another large wallet, the balance of which, after the transaction, amounted to more than 454,547 ETH. Today, however, this wallet is empty: on November 21, in the course of seven transactions, it transferred all 454,547.072 ETH. In this case, the first six transactions (five by 50 ETH and one worth 46,052.99921 ETH) were sent to the same address, and the largest transaction of more than 158,494 ETH was to a separate one. Further on, almost the entire amount (158,494 ETH) went a long way through several addresses to Kraken, Bitfinex, and Binance.
If you look at other recent “remarkable” movements on the blockchain, many of them (transfers of 115,000 ETH, 97,476 ETH, and 152,071 ETH on November 19, as well as three transactions at 25,000 ETH, 25,000 ETH, and 40,000 ETH conducted on November 14–15) were also accumulated at this address, which suggests that all these addresses are under the control of one whale. Moreover, the address that sent a 115,000 ETH transaction to on November 19 was also the recipient of 436,000 ETH deposited after the pre-sale. Today, this address has been sold out: in addition to 115,000 ETH, it carried out two more transactions: on November 21 (91,000 ETH) and December 5 (229,999.999086 ETH), which together amounted to 435,999.999 ETH, that is, almost equal to the accrual within the framework of the pre-sale.
If 115,000 ETH continued its journey to the exchange through a number of other addresses, then the amounts of 91,000 ETH and 229,999.999086 ETH are still on the same address, unmoved.
It should be noted that not all the “movements” of the whales should be considered as an anomaly. For some addresses, the transfer of large amounts, including their transfer to the exchange, is a regularity that is easy to follow through the transaction history of the address.
Thus, the transfer of 17,723 ETH to OKEx—which happened on November 26 and later became the reason for yet another FUD news that the whales were dumping Ether—is quite common for this account. Judging by the transactions, this address has been used for trading since March 2018, and regularly displays (sometimes) large sums from exchanges, usually Gemini and sometimes Bitfinex, and transfers them to OKEx, probably because this exchange allows one to exchange their crypto for Chinese yuan.
Other major transactions starting from November 30:
In late November and early December, 1,000 ETH and 25,074 ETH were withdrawn from the Kraken and Poloniex exchanges by one of the whales, who last transferred funds to this address on December 18, 2017 (also from Poloniex) and traded a lot from May to December 2017, withdrawing 6,000 to 13,000 ETH from the exchanges at a time.
On November 30, Whale Alert reported several more major transactions involving the sending of approximately equal amounts at intervals of a few minutes or hours, and many of them ended in the same pattern of creating accounts for 150,000 or 112,500 Ethers, which remain intact. The first such transaction was sent at 03:33 AM UTC and contained 183,371 ETH, of which 180,000 ETH at the moment (probably temporarily) ended up on two accounts, to which they were sent during 48 separate transactions.
A second similar transaction was sent from another address in a few minutes. It contained 245,300 ETH, most of which, also in the course of a multitude of transactions worth 3,750 ETH, spilled over to several now-idle addresses in 150,000 ETH increments.
Then, after a few hours, another transaction was carried out, this time worth 552,124 ETH, and it also broke up into a multitude of 3,750 Ether transactions that formed accounts 150,000 ETH accounts.
Two hours later, a new transaction—amounting to 672,524 ETH—was sent. It left an address that had been idle for more than 200 days. Except for small amounts of 4, 6.5, and 3.8 ETH, which were sent to Binance, most of the funds went to the same “magical” 150,000 ETH addresses in 166 transactions at 3,750 ETH each. And one of the child addresses in this chain transferred about 20,000 ETH to Kucoin in the last six days.
By the end of the day, several more similar transactions were performed: 221,989 ETH (a significant part of this transaction went to Binance and Bitfinex), 224,804 (most of it flowed to accounts containing 150,000 Ethers in the form of transactions for 37,500 Ethers), and 672,784 ETH—from it, a small part of 25.9, 16.9, 4.5, and 7.4 ETH went to Binance, and 597,699 ETH in batches of 4 transactions of 37,500 ETH (and one transaction at 35,199 ETH) to 4 separate addresses (1, 2, 3, 4), which, like other similar addresses, are so far intact.
On December 1, over half a million Ethers (1,538,423 ETH) went to a new address, thus emptying an address with a history from August 2016 until December 1, 2018, that had been used exclusively for accumulating funds. Judging by the sources of the funds, the address belongs to the user who was engaged in mining and trading. The Ether came from the addresses of the pools Miner Gate, Nanopool, Ethermine, as well as from the exchanges of ShapeShift, OKEx, Bittrex, Poloniex, BTC-e, and others.
Several relatively small amounts were transferred to Gemini (~2,456 ETH), Binance (12 ETH), Bitfinex (1,000 ETH), and Kraken (~1,300 ETH and 3,000 ETH).
The biggest portion of funds, 1,350,000 ETH, flowed in familiar batches (4 transactions, 37,500 ETH each) to 9 new addresses and did not move from them since. The “orderliness” was slightly broken at one address, as it contains an even 150,000 ETH transferred in the course of 5 transactions.
The uneven amount of 76,475 ETH flowed to another address. And 23,951 ETH from the original 1,538,423 ETH has so far remained untouched.
On December 3, an unknown large address owner withdrew 20,000 Ethers in two batches—19,900 ETH and 100 ETH. It was one of the few outgoing transactions from the address that has been accumulating Ether from July 2018 (and usually received round sums of 20, 50, 120, 250, and 500 ETH). And it has become the largest outbound transaction from this address. Then, 19,999.994 ETH merged at the same address went to Binance.
That Is Not How It All Happened
While many people are panicking that the whales are selling their cryptocurrency and dumping Ether, researchers see the situation in a completely different way.
According to the latest weekly analyst report from the Diar research group published on December 3, the Ethereum whales are continuing to accumulate funds and have only intensified in doing so, using the price that is favorable for buying.
According to the study, since January 2018, the amount of Ether on the top 500 whale wallets has increased by 80%. Thus, as of January 1, the whales owned 11 million Ethers, and by November 30, this figure was already 20 million, which corresponds to approximately 20% of the total Ether in circulation.
Diar assumes that the whales may have begun to strengthen their Ethereum estates because the SEC has returned to active regulation of the crypto market, as well as a change in attitudes toward ICO projects. For example, the SEC recently fined AirFox, Paragon, and the EtherDelta exchange, and some experts called it “the beginning of the second phase of regulation.” Presumably, the behavior of the SEC has frightened many altcoiners, who rushed to exchange ERC-20 tokens bought during various ICOs for Ether.
The Diar researchers note that although whale savings in fiat equivalent fell by 90%, their balance in Ether for the 4th quarter of 2018 increased by 270% compared to the 3rd quarter.
How Is Vitalik Doing?
Buterin’s account remains without serious change. “Hodler level: expert,” wrote one commentator under Ethereum inventor’s address page on EtherScan. Now it contains 355,003 Ethers, and over the last 300 days, only one outgoing transaction has been sent from it—10,000 ETH on November 22. The owner of the receiving address has not been established; however, transfers to it are of a periodic nature (and were more frequent earlier). Four more transfers of 10,000 ETH from Buterin’s address to this address were made in December 2017 and February 2018, two transfers of 20,000 ETH went to it in May and July 2017, and a transfer of 14,998 ETH in June 2017. Some assume that Buterin controls this address as well.