1.035 Million ETH Worth $4.16 Billion by Whales and Institutions: Why is Ethereum Rallying?

Key Highlights

• 1.035 million ETH tokens worth $4.16 billion have been accumulated by whales or institutions in one month

• Why is Ethereum rallying? Mainly because of increased whale and institutional demand.

Ethereum has experienced massive gains on its price charts over the last 3 months. Since bottoming in April, the altcoin has rallied more than 60% breaking its long-term resistance of $4k. With the altcoin making such massive gains, the question is, why is Ethereum rallying? 

Through this article, we will examine why Ethereum is rallying.

Why is Ethereum Rallying?

One of the significant reasons why Ethereum is rallying is sustained accumulation by whales, institutions, and small-scale investors. According to EmberCN, since July 10, over 1.035 million ETH tokens worth $4.167 billion have been accumulated by unknown whales or institutions through exchanges and institutional platforms. 

For example, over the past day, a newly created wallet bought 4,000 $ETH, worth $15.65 million, from Binance, likely for staking with LidoFinance. Also, EMCryptohub reported that Whales accumulated $2.9 billion worth of ETH. That is not all, institutions have been aggressively accumulating the altcoin, with major players such as Sharplink becoming one of the largest holders. 

After a long period of accumulation, Sharplink now holds 532,914 ETH tokens worth $2.07 billion. Over this period, ETH surged 45% from $2,600 to $4,000, with most of the holdings likely belonging to institutions or U.S.-listed firms holding ETH reserves. 

Capital inflow From Institutions Soaring

Before Ethereum declined to almost $1k months ago, Institutions had starved the altcoin of capital. Most institutions were mainly accumulating Bitcoin and trying to buy more. 

Since the tariff trade war started, Institutions started buying Ethereum, especially as many viewed Bitcoin as extremely expensive to buy a significant amount. Now, we can see the tides have turned, and options markets are heating up. 

Based on Coinglass Data, Ethereum Options Volume surged 60.4% to $3.3 billion. Over the same period, Options Open Interest rose by 10% reaching $14.48 billion. This massive jump in options volume and interest indicates that institutional investors are highly active and are aggressively buying Ethereum.

American Investors top the market.

Since early May, American investors have shown great demand for Ethereum and have bought the altcoin more than before. For the last 3 months, the Coinbase Premium Index has turned negative for only 7 days, with 1 day between May and late July.

Currently, the Coinbase Premium Index sits around 0.03, indicating that the recent ETH rally to surpass $4k and hit $4.2k was mainly driven by U.S. investors.

Since the Korean Index is currently negative, we can take that as a view that Korean investors are not buying ETH. This leaves us with U.S. investors, and therefore, the main reason why Ethereum is rallying is accumulation by U.S. investors.

Can ETH Rally to $5k now?

After surpassing $4.2k, Ethereum is now testing its ATH of $4.8k. With institutions aggressively accumulating the altcoin, we could see the rally continue to reach new levels.

Under these circumstances, if whales and institutions continue buying Ethereum at the current pace, their demand will boost the ETH price performance and continue with the rally. Therefore, if the trend continues and ETH retest ts previous ATH, the next stop will be $5k a fresh high.