Ethereum (ETH) is the largest and most used decentralized finance (DeFi) and Web3 layer-1 blockchain infrastructure. Its native token, ETH, is the second largest cryptocurrency by market cap at $270 billion at the time of publication.
The price of Ethereum increased by 85% last year. It is currently trading at $2,249 per token. According to IntoTheBlock’s data dated December 16, this increase rewarded ETH holders, who are currently at a 76% profit.
Notably, the percentage of Ethereum investors who are in profit is the same as long-term holders who have held their positions for more than a year. Both data sets were obtained by looking at all active addresses on the network from received and spent transactions.
Koinfinans.com As we reported, 23% of all Ethereum wallets held a losing ETH position, while 1% purchased the token at current prices. At the same time, 21% of Ethereum holders have held their positions for between one and 12 months, while 3% have recently purchased ETH.
It is important to understand that as the number of ETH holders in profit increases, the possibility of selling also increases as they may want to realize hitherto unrealized profits. So buying ETH right now could mean becoming a profitable exit liquidity for 76% of all Ethereum holders.
Meanwhile, only 46% of tokens are concentrated in the hands of addresses holding at least 0.1% of their supply. The low concentration of whales and institutional investors reduces the risk of large coordinated selling.
cryptocurrency investors arguably believe that we are either experiencing a bull rally in a bear market or an existing bull market. Understanding the current state of cryptocurrencies is crucial to making a profitable decision about buying or not buying ETH.
Moreover, further development for Ethereum and the growth of the DeFi ecosystem could create more demand for the token. While increasing demand will push ETH prices up, decreasing demand will create the opposite result.
All things considered, the decision to purchase ETH is a personal one and investors should be aware of the risks.