Into the Ether: 90% of all ETH wallets now “out of money”
Ether has dropped significantly from record highs and most of its holders are losing money on their investments.
The second largest cryptocurrency, which drives the ethereum blockchain, is currently trading at $ 131, representing a 90 percent drop from the historical high of $ 1,431 reached in early January 2018, according to the index of CoinDesk ether prices.
The relentless price drop has pushed 90 percent or 31.31 million ether addresses “out of money,” according to blockchain intelligence firm IntoTheBlock.
An address is said to be out of money if the current price of the ether is lower than the average price at which the currencies were purchased or sent to an address.
So, 31.31 million ether addresses have acquired currencies at an average price higher than the current ether value of $ 131.
A large part of the addresses outside the money bought coins in the range of $ 211 to $ 530. It should be noted that the largest group, about 4.77 million addresses, has an average cost of $ 262 to $ 352.
Around 3.58 million addresses have bought coins in the range of $ 745 to $ 1,340. Since its launch, the ether has so far traded above $ 747 for only six months, from the meteoric recovery of October-December 2017 to its price drop in the first quarter of 2018.
Meanwhile, a mere 8 percent or 2.79 million addresses are “in the money”, the acquisition cost is lower than the current price of the ether and 1.78 percent of the addresses are “in the money”, with a Average purchase purchase price almost equal to the current spot price.
Most of the addresses in the money have acquired coins in the range of $ 0 to $ 130, while 4,120 addresses have an average cost of $ 0. These could be the first buyers who bought ether in the period between August 2015 and December 2015, when the cryptocurrency was traded in cents.
While the number of addresses in the money is small, the volume of ether that these addresses contain is quite significant.
Only 8 percent of the addresses are in the money, but they contain 31.24 percent of the total ether of all addresses. That equates to 34.05 million ethers ($ 4.5 billion). These investors have already seen their huge profits evaporate in the last 23 months and can unload their holdings if prices find acceptance below $ 100, which adds to the downward pressures around ether.
The addresses out of money have 73.13 million ethers. Address groups with an average price in the range of $ 144- $ 170, $ 212- $ 262 or $ 262- $ 352 have a total of 36.24 million ethers.
Second half brutal
The number of addresses in the money may have been greater at the end of the second quarter of this year, when the ether was trading near $ 360.
The cryptocurrency recovered more than 120 percent in the first six months of 2019 only to fall 54 percent in the second half.
In fact, ether is not the only cryptocurrency that has faced intense selling pressure in recent times. The market in general has received a beating, courtesy of the fall of bitcoin from June highs above $ 13,800 to recent lows near $ 6,400.
However, bitcoin, the main cryptocurrency, has still risen 103 percent in annual terms. On the other hand Ether, at the time of publication presents a marginal loss of the year to date.
Some observers believe that Ethereum’s persistent scalability problems probably hurt investor confidence, which led to a fall in prices.
“Ethereum has consistently breached the deadlines for protocol updates,” Connor Abendschein, a research analyst at Digital Assets Data, told CoinDesk. “It was assumed that Ethereum 2.0 had already entered into force earlier this year, and has not yet been implemented.”
Ethereum 2.0 is a major network update that will change the current blockchain test consensus consensus algorithm to participation and the validation function of transferring miners to special network validators.
In other words, ether holdings, under proof of work, miners compete with each other to solve a difficult puzzle (algorithm) to add each block to the chain. Under proof of participation, there is no competition since the creator of the block is selected based on the user’s participation in the project.
The market expects the first update to be implemented in January 2020. However, Ryan Selkis, CEO of Messari, believes that the transition will not occur until 2022.
In addition to the unfulfilled deadlines, the sale by an early HODLer probably reduced the cryptocurrency.
As Alex Svanevik, a data scientist at Crypto Land and co-founder of the data science firm D 5, noted, an address dating back to 2015 has moved more than 300,000 ethers to exchanges in the last four months.
Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.