Bullish news and new ATHs have woken up some old ETH reservoirs and made big wallets move. The friendly cat next door dragged in some charts to illustrate where this money went.
Big and old assets decide to move
Recently ETH is in the spotlight after media reports about the European Investment Bank's plans to launch a "digital bond" sale on the Ethereum blockchain network. If you are curious, The European Investment Bank is the European Union’s investment bank and is owned by the EU Member States. It is one of the largest supranational lenders in the world. No wonder even some heaviest hodlers of ETH started moving their assets. To show you what I mean here are some charts:
As you can see, some really fat cats started to move some very old ETH. This made me uneasy, since I prefer when big money sits still and don't rock my trading boat, just waiting to buy local dips and save the price from falling too hard. Also, since big money loves to buy the dip, they are also very good at selling the top - mainly because if they flood the market, they decide where the top is. So forgive me for feeling uneasy, when I see that ETH that was sitting still for 4 years suddenly feels urge to move.
Fortunately they don't seem to sell
The direction of this move seems rather bullish than not. While last week $6.8B was transferred into exchanges, $8.2B was transferred out, leading to an overall net flow of -$1.4B. So if all that ETH is not going towards exchanges (phew...) where does it go? There are reasons to think it goes into DeFi. Check out the ratio between funds on exchanges and locked in smartcontracts.
Looks like it took a rumor about The European Investment Bank using ETH to launch a financial instrument to convince those hodlers to use ETH the way it supposed to be used - as a smartcontract fuel. While it might bring more volatility to the market, I'm quite glad that this is the way this huge supply of ETH is heading. More use of the network means it fills its purpose and proves to be a reliable tool - in a long term nothing could be more bullish.
There is just one wory on my mind because of this - will the ETH network live up to its promises. I would be more relaxed if this move was made after the ETH 2.0 went live, since the memory of substantial network congestion and prohibitive fees that gave insane boost to competition (BSC for example) is still fresh in my memory. ETH was close to being the victim of its own success and I really hope this scenario will not repeat itself in a more severe manner this time. But hey, you will never know if you won't try - right?
May your account grow fast and cans of tuna be full,
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This is not a financial advice – I’m no financial adviser, nor is this a legal advice – although I’m a lawyer. This is no advice at all, seriously, don’t take advice from random cats – the Internet is full of them! DYOR!