Immediately upon interacting with a blockchain, much data becomes publicly available on a public ledger. Analyzing this data may provide crypto traders and investors with helpful insight into the present state of the market. In “The state of crypto”, we take a look at the most important metrics to observe the market based on transaction and trading activity. Our main focus is the two largest cryptocurrencies Bitcoin and Ethereum, and we divide the metrics into short-term and long-term indicators. You find the report for the last month here.
Ethereum successfully implemented the highly anticipated hard fork called Shanghai – or Shapella – on the 12th of April. Among other minor advances, the most noted addition was the technological possibility to unstake Ether. This slowly opened the floodgates to the 19.2mn staked Ether worth about $37bn at the time, some of which have been staked since the 1st of December 2020, effectively locked for about 2.5 years. This amounts to more than 20% of the total circulating supply of Ether. The option to unstake Ether has caused an intense reshuffle of staked Ether, alongside staking rewards for the past more than two years. It is arguably the reason for the slight uptick in exchange balance and dormant circulation of Ethereum in April.
In particular, the exchange balance of Ether increased a whole lot yesterday on the 1st of May, as Ether worth $505M was transferred to the world’s largest cryptocurrency exchange Binance. At first sight, it appears to be an unknown wallet transferring the Ether, however, it is a transfer from Binance itself, specifically from its wallet with its clients’ staked Ether and staking rewards. Binance is likely to distribute the Ether to clients in the coming days and weeks. This may increase selling pressure, in case many clients decide to liquidate the Ether. However, we do not expect the majority of the holders to do so, considering that the option to unstake Ether has so far triggered much less selling pressure than anticipated.