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"Ethereum Whales Accumulate Amid Volatility; ETFs See Outflows"

Coin WorldWednesday, Jan 29, 2025 1:42 am ET

1min read

Ethereum's recent market volatility has not deterred institutional investors from accumulating the world's second-largest cryptocurrency. Despite the ups and downs, Ethereum has seen a surge in activity and whale accumulation, signaling a potential recovery amid market corrections.

The average number of active Ethereum addresses has reached a record high of over 620,000, the highest level since March 2024. This increase in activity highlights the growing use cases and acceptance of the Ethereum blockchain, driven by decentralized finance (DeFi), non-fungible tokens (NFTs), and innovative layer-2 solutions.

Institutional investors have also shown strong confidence in Ethereum, with World Liberty Financial (WLF) leading the charge. Over the past week, WLF has invested $129.95 million to acquire 39,242 ETH at an average price of $3,312. Despite a temporary unrealized loss of $5.12 million due to short-term price fluctuations, WLF's rapid accumulation of Ethereum indicates the firm's long-term faith in the asset's potential.

However, market sentiment among ETF investors has been more cautious. As of January 27, Ethereum spot ETFs experienced a total net outflow of $136 million, reflecting a shift in institutional sentiment. Grayscale's Ethereum exchange-traded fund (ETHE) alone saw a single-day net outflow of $84.24 million. Despite these outflows, Ethereum ETFs still maintain substantial total net asset values, with Grayscale's ETHE at almost $6 billion and the VanEck Ethereum Strategy ETF (VETHE) at about half that.

Ethereum's recent performance underscores the dualism between on-chain activity and market mood. While accumulation by whales and an uptick in active addresses point to fundamental bullishness, outflows from Ethereum ETFs indicate that institutions are not yet ready to dive back into Ethereum. In a volatile market defined by swift price movements and macroeconomic influences, this sentiment is not unusual.

The rise in active addresses and whale accumulation highlights Ethereum's strength as a top blockchain network. As Ethereum continues to evolve through network upgrades and innovations, it remains a bedrock of the greater cryptocurrency ecosystem. Long-term investors may find opportunities to accumulate assets at discounted

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