The number of wallets holding more than 1,000 ether has surged to a 15-month high as the ethereum merger upgrade looms.
This may be a bullish signal for Ethereum, as the first phase of the merger upgrade has been launched on September 6, and the second phase is expected to be launched around September 15. Investors expect that after the upgrade is completed, Ether will be expected to rise sharply. The last time there was a surge in ether wallet addresses was around May last year.
The data shows that the surge in the number of ether wallets this time coincides with the increase of a single address, with more than 200 million wallet addresses on September 4. While an increase in wallet addresses does not necessarily represent an increase in activity on the Ethereum network, it does indicate an increased level of market interest in Ethereum.
Why is everyone hoarding ether?
Since this merger will move Ethereum from proof-of-work (PoW) to proof-of-stake (PoS), which means Ethereum will eliminate the mining mechanism, miners are currently leading the fork in order to maintain the PoW chain and pay to Ethereum Holders airdrop ETH PoW tokens.
Today, the increase in the number of wallets holding more than 1,000 ETH may be in preparation for an airdrop of ETH PoW tokens, as exemplified by the high usage of ETH on the decentralized financial lending platform AAVE. A high usage rate means that the majority of the lending pool has been lent out.
However, there is more evidence that the surge in wallets holding more than 1,000 ETH is due to expectations that ETH will rise following the merger upgrade.
One of the signs that ether may be surging is the amount of ether traders are shorting. Data from blockchain intelligence firm Santiment showed that traders shorted ether on Aug. 30 to levels not seen since June of last year. Historically, after a period of large short positions, the price of the currency will rise sharply.
In the long run, if the merger and upgrade are successful, the number of ether holders may increase, which will eventually lead to a slowdown in the issuance model of Ethereum, which in turn reduces the amount of ether in circulation and pushes up ether prices.
