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, Original Author: Tim Hakki, Compiler: Bai Ye, reproduced by Odaily with authorization.
Content overview:
1. More than $1.6 billion in ETH left cryptocurrency exchanges last week;
2. An analyst explained that these ETHs may have entered DeFi, and many large investment companies have begun to snap up ETHs for Ethereum 2.0 pledge;
3. Of course, there may still be some unanswered questions about these analyses.
In the waters of the Ethereum blockchain, we found several heavyweight whales.
According to a tweet published by the cryptocurrency analysis team Glassnode on Saturday, January 23, the Ethereum balance of the leading cryptocurrency exchange hit a 15-month low, only 15.4 million ETH (about 20.5 billion US dollars).
This exodus began last Tuesday (January 19), when the ETH token holdings of the leading cryptocurrency exchange were approximately 16.6 million, which means that at least 1.6 billion US dollars were held during this time. Funds leave the exchange. According to reports from the Twitter account of Whale Alert, a large cryptocurrency transaction tracking robot, most of the ETH has been transferred from leading cryptocurrency exchanges to anonymous wallets.
The question now is, where did all this ETH go? What is the cause of the capital flight?
Experts analyze the reasons for ETHs funds fleeing
Pedro Febrero, an analyst at crypto fund firm Quantum Economics, believes that there may be three reasons for the large outflow of ETH tokens from exchanges in the past week.
First of all, Pedro Fufrero believes that one of the main reasons is DeFi, because Ethereum tokens are the most commonly used tokens for DeFi lockups. He explained: Many ETH tokens have been re-locked in DeFi protocols. , DeFi refers to decentralized finance, including decentralized lending agreements, decentralized exchanges, and some derivatives agreements.”
However, Pedro Fufreros explanation does not seem very strong. Because according to the smart contract lock-up amount tracking Mr. Wang’s DeFi Pulse data (as shown in the figure below), the number of ETH locked in DeFi has not actually increased. Last Tuesday (January 19) was about 7 million, last Wednesday (January 19) 20) to 6.9 million, and then back to 7 million. According to this figure, at best only 100,000 ETH tokens have moved, which is actually not much compared to the ETH flowing out of the exchange. What about the rest? (Of course, the premise here is that the data of DeFi Plus is correct.)
Pedro Fufrero gave a second analysis, as shown in the graph below: Since December 2020, the amount of ETH locked in the beacon chain (proof-of-stake consensus) has increased by 320%. What Pedro Fufrero is talking about here is actually the ETH locked in the Ethereum 2.0 smart contract, the next generation upgrade to the Ethereum blockchain, where many people are currently investing money to protect network and earn rewards by staking tokens.
Pedro Fufrero’s third and final analysis prediction is that institutional investors like Grayscale start accumulating ETH (as shown in the chart below). Pedro Fufrero explained: “Institutional investors, as well as investment funds like Grayscale are accumulating Ethereum, which no longer provides more funds for publicly traded Ethereum funds, according to data from the crypto metrics network BYBT. More ETH, which probably means they are starting to tend to accumulate.”
Original link:https://decrypt.co/55213/analyst-gives-three-reasons-why-1-6-billion-in-eth-just-left-exchanges
