Long-term Bitcoin holders are starting to sell the BTC they have been holding since the bear market back in January, as spot Bitcoin ETFs were listed in the United States. On the other hand, long-term Ethereum holders are still accumulating ETH. Research from IntoTheBlock shows that understanding the behavior of long-term holders is crucial for understanding market cycles, as profit-taking usually begins in the early stages of a bull market and continues past the cycle peak. Bitcoin’s dominance in the cryptocurrency space makes it a straightforward asset to measure these cycles as other digital assets tend to follow Bitcoin’s lead.
The analysis by IntoTheBlock shows a noticeable deviation in the behavior of long-term ETH holders, who are currently accumulating new tokens. This behavior contrasts sharply with the last cycle, where Ethereum holders’ behavior closely mirrored that of Bitcoin holders. This shift is likely driven by the attractive yield opportunities available within the Ethereum ecosystem, including staking mechanisms and decentralized finance strategies that allow holders to earn passive income on their holdings. A significant 27.5% of the total ETH supply is currently staked, with a portion being re-invested through protocols like Eigenlayer, Karak Network, and Symbiotic.
The potential approval of a spot-traded Ethereum ETF could also be influencing the behavior of long-term Ethereum holders. The recent SEC approval of applications from major stock exchanges for spot Ether ETFs marks a significant shift in the regulatory environment surrounding cryptocurrency. Individual ETF issuers such as VanEck, ARK Investments, and BlackRock are still waiting for SEC approval to begin trading. With over 83% of current ETH holders already sitting on a profit and additional catalysts on the horizon, Ethereum could be poised for a significant rally. Over 89% of BTC holders are currently in a state of profit, but investors holding Bitcoin appear to be more bearish.
Overall, the data from IntoTheBlock suggests that long-term holders of Bitcoin and Ethereum are exhibiting different behaviors in the current market cycle. Bitcoin holders are starting to take profits, while Ethereum holders continue to accumulate tokens. The emergence of attractive yield opportunities in the Ethereum ecosystem, including staking mechanisms and decentralized finance strategies, is likely driving this shift in behavior. The potential approval of a spot-traded Ethereum ETF by the SEC could further influence the behavior of long-term holders, who may be waiting for a surge in price before considering selling their ETH. With both Bitcoin and Ethereum holders sitting on profits and additional catalysts on the horizon, the cryptocurrency market could be in for an interesting period of growth and price movements.
