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  • Ethereum whale addresses, with at least one million ETH, now control one-third of the total Ethereum supply.
  • ETH continues to underperform as the Ethereum staking yields drop much below the US Treasury Yields.

The world’s second-largest cryptocurrency Ethereum (ETH) has been under strong selling pressure underperforming Bitcoin and other cryptocurrencies. While the ETH price trades under $1,600 billionaire-tier whale addresses have been accumulating the crypto in big numbers.

In a recent tweet, Santiment revealed that Ethereum’s billionaire wallet holders, those with a minimum of one million ETH, now account for a significant portion of the token’s total circulating supply. More precisely, these ETH whale addresses currently possess 32.3% of the available token supply.

This percentage signifies the first instance of such wealth concentration in seven years since 2016. Additionally, the market tracker reported that the Ethereum network recently saw its second-highest day of transactions surpassing $1 million in the last five weeks.

Santiment’s tweet featured a comprehensive market chart, emphasizing the growing influence of billionaire Ethereum wallets, which now hold almost a third of the total ETH supply. The chart also visually demonstrated the evolution in Ethereum’s wealth distribution, showcasing a consistent increase in the dominance of “Uber Whales” addresses until it matched the levels observed in July 2016.

Additionally, the chart depicted the recent surge in ETH transactions exceeding $1 million. It highlighted that on October 16, there were 409 such Ethereum whale transactions, marking the second-highest daily count of such transactions in the past month.

Ethereum Addresses Surge Past 100 Million

As per on-chain data reported by @finelady_p on X (formerly Twitter) and later reiterated by blockchain analytics company IntoTheBlock (ITB), there has been a consistent rise in the count of addresses with a balance over the past few years. This observation underscores Ethereum’s optimistic prospects, suggesting an increasing interest in cryptocurrency and a growing trend of long-term ETH holding.

Why is Ethereum Underperforming?

Despite all the strong on-chain metrics and heavy accumulation, the question remains as to why ETH continues to underperform. One of the key factors supporting demand for Ether, the second-largest cryptocurrency, is losing strength amid rising Treasury yields.

Crypto enthusiasts have been able to generate returns by locking up their Ether tokens to assist in Ethereum’s blockchain operations. This staking process has historically acted as a support for Ether’s value. However, the staking rewards for committed tokens have declined to an annualized rate of 3.5%, reaching one of the lowest points in the last ten months. This rate is significantly below a recent peak that exceeded 8%.

Furthermore, the current staking return is falling short of the 5% yields provided by US government bonds, which have traditionally been regarded as a cornerstone of the conventional financial system. This disparity exemplifies how the appeal of the often volatile crypto market has been eroded by the shift away from the ultra-low interest rates that were prevalent during the pandemic.

In September, the quantity of Ether coins that were staked declined by 67%, totaling 1.2 million coins, as reported by a Dune Analytics dashboard.

JPMorgan Chase & Co. strategists, including Nikolaos Panigirtzoglou, have observed that this surge in staking has diminished Ethereum’s appeal in terms of “yield,” particularly when contrasted with the increasing yields in traditional financial assets.

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