Ethereum (ETH) may be gradually turning into a store of value based on the amount of digital assets held by long-term investors, CryptoSlate’s analysis of Glassnode data reveals.
With Ethereum falling more than 70% from its all-time high in the current market cycle, one would think that investors would be dumping their coins en masse to recover their money.
However, Glassnode HODL wave data shows that long-term investors now hold 80% of the ETH supply, i.e. those who have held the token for more than 6 months, which is the bear market of 2018. Very similar to levels.
HODL Wave is a metric used to measure the number of investors holding a particular digital asset.
The fact that many long-term holders have yet to sell their assets suggests their confidence in the long-term value of ETH. This is a common sign for bitcoin where long-term holders usually hold rough patches as they believe the asset will be valuable in the long run.
In fact, at the height of the Terra collapse epidemic in July, a new cohort of long-term holders of Ethereum for 7 to 10 years began to emerge. According to the chart above, this group of investors holds about 3% of the total ETH supply.
1-2 year band investors are submerged
On the other hand, ETH investors who hold for 1-2 years are probably under the surface given the bull market in 2021 and likely buying in early 2022.
The group’s total supply increased significantly in July 2022, with most of the assets trading above $1000. These investors currently hold 40 million ETH, which is similar to the amount held by BTC investors who have held it for at least a year.
Glassnode data also shows that the total ETH supply loss is now at 44 million ETH, down slightly from the June cycle peak of 50 million. This pales in comparison to numbers recorded during the Covid-19 pandemic and his 2019 bear market when supply losses topped his 72 million tokens.
Despite the sharp drop in ETH in 2022, with low losses, most investors are bullish on the asset and expect its value to rise significantly over time.
The bullishness ties in with the fact that the ETH supply has been in a deflationary state several times since the merge event. Analysts predict increased network activity will lead to sustained deflationary supply.