Long-term ETH holders brush off the SEC’s recent probe of the Ethereum Foundation.
Following the approval of spot Bitcoin ETFs in January 2024, speculators immediately turned their attention to Ethereum (ETH), anticipating that the SEC was set to approve ETFs backed by the asset next. Recent reports suggesting that the SEC seeks to label the asset a security, however, have sent hopes of an Ethereum ETF approval diving. Despite the recent uncertainty and market jitters, data suggests that long-term ETH holders are undeterred and even adding to their holdings.
More Upside in the Card for Ethereum?
On Friday, March 22, IntoTheBlock data shared by the firm’s Head of Research, Lucas Outumoro, suggested that long-term holders who have held ETH for over one year have been unfazed by the SEC’s recent probe of the Ethereum Foundation. On the contrary, the amount of ETH held by this class of investors continues to reach new highs at over 98 million ETH.’
Chart of ETH Balances by time held
Source: X
Explaining the behavior of these long-term ETH holders, Outumoro suggested that they likely believed that the asset’s bull rally had yet to be exhausted.
“Based on previous market cycles, it appears that hodlers still believe ETH has room to continue appreciating. As we’ve covered before, Hodlers tend to sell into the later stages of a bull market and begin re-accumulating after 50% drops.”
Meanwhile, the lack of selling from long-term holders is not the only key metric unfazed by the SEC’s recent probe, as on-chain volumes are also rising.
ETH Volumes Tap Highest Level in Over 2 Years
According to IntoTheBlock data, ETH on-chain volumes reached their highest level since May 2022 this week at about $12.27 billion. As highlighted by Outumoro, Layer 2 chains dominate with combined transaction numbers on Base, Optimism, and Arbitrum, more than double that of the Ethereum mainnet.
Chart of ETH transaction volume
Source: X
Outumoro suggested that the recent Layer 2 dominance was only likely to continue following the recent Dencun upgrade, which has led to a dramatic decrease in gas fees on these chains.
Citing the lack of long-term holders selling and rising volumes, the analyst suggested that the Ethereum ecosystem would likely continue to grow despite recent concerns.
