Ethereum’s Supply Concentrates in the Hands of Mega Whales, Raising Concerns

Recent on-chain analysis reveals that Ethereum's supply is increasingly concentrated in the hands of a small number of large holders, with the biggest addresses continuing to amass more tokens.

Data from on-chain analytics provider Santiment has highlighted a growing trend of concentration within Ethereum’s circulating supply. The key metric in focus, “Supply Distribution,” tracks how much of Ethereum’s total supply is controlled by different groups of wallets based on their holdings.

🐳 There are currently 104 whale wallets holding at least 100K Ethereum. Their combined holdings currently sit at 57.35% of all existing ETH tokens, currently worth ~$333.1B.

Meanwhile, wallets with 100-100K hold their lowest ratio of supply in history, 33.46%. And sub-100 ETH… pic.twitter.com/9qDN3lotQy

— Santiment (@santimentfeed) December 17, 2024

The wallets are categorized into cohorts depending on the amount of ETH they hold. Three significant ranges stand out: wallets holding between 0 to 100 ETH, 100 to 100,000 ETH, and those holding more than 100,000 ETH. The smallest group represents retail investors, whose holdings don’t significantly affect the market. The middle category, containing both sharks and whales, shows wallets with larger stakes, with whales becoming the most influential.

However, the real dominance comes from the “mega whales” — wallets holding over 100,000 ETH. Currently, just 104 such mega whales control over 57% of Ethereum’s total supply, a figure that has steadily risen. This concentration is particularly significant because the power of these holders can sway the network’s future.

On the other hand, smaller wallet groups, including sharks and mid-sized whales, have seen their influence decline. As of now, wallets in the 100 to 100,000 ETH range hold just 33.46% of the supply, marking a notable drop in their share.

While centralization of any cryptocurrency’s supply raises concerns, Ethereum’s Proof-of-Stake (PoS) consensus model makes this issue particularly critical. With such a high concentration of ETH held by a small number of entities, the risk of centralization grows. If these mega whales, or the platforms managing their holdings, were to control over 51% of the supply, they could potentially dominate the network’s operations.