Ethereum Long-Term Holders Surge in 2024, While Bitcoin Holders

In 2024, Ethereum (ETH) holders demonstrated greater long-term conviction compared to Bitcoin (BTC) holders, with the proportion of long-term ETH holders steadily rising while the number of long-term Bitcoin holders declined. This shift indicates a growing confidence in Ethereum as the market approaches 2025.

Ethereum Holders Show Stronger Commitment

According to data from IntoTheBlock, as of December 30, 2024, the percentage of long-term Ethereum holders had increased significantly, rising from 59% in January to 75% by year-end. This steady accumulation suggests that more investors are confident in Ethereum’s long-term potential. IntoTheBlock defines long-term holders as those who have held their assets for more than a year.

Meanwhile, the percentage of Bitcoin long-term holders experienced a decline over the same period. Bitcoin’s long-term holding ratio fell from approximately 70% at the start of 2024 to 62% by December 30, reflecting a shift in investor sentiment as Bitcoin’s market dynamics fluctuated. As of the end of the year, 62.31% of Bitcoin holders were classified as long-term holders, compared to 75.06% of Ethereum holders.

Implications for Market Sentiment

This change in holding behavior could be a key indicator of shifting market sentiment. The growing proportion of long-term Ethereum holders suggests an increasing confidence in the cryptocurrency as it heads into 2025. Ethereum's stronger showing among long-term investors may also reflect the success of Ethereum’s network upgrades, such as the transition to proof-of-stake and the rise of decentralized finance (DeFi) applications, which have boosted its value proposition.

Bitcoin’s Recent Volatility and Long-Term Holders' Behavior

In contrast, Bitcoin has experienced greater volatility in 2024. Following a peak of $106,000 in mid-December, Bitcoin's price dropped to around $93,000, driven in part by long-term holders cashing out during a period of market euphoria. Technical analyst Ger Van Lagen suggested this sell-off was the result of long-term holders taking profits amid a price surge. However, he maintained a bullish outlook on Bitcoin, forecasting that the asset could surpass $200,000 in the near future.

While Bitcoin’s price fluctuated, the overall trend of long-term holders selling off some of their positions might indicate a shift in the behavior of Bitcoin investors, with some opting to take profits after significant price gains.

Ethereum’s Rising Popularity and ETF Inflows

Ethereum has seen significant growth in recent months, particularly in institutional investment. In December 2024, spot Ether exchange-traded funds (ETFs) saw a surge in net inflows, with a remarkable jump from $1 billion in November to $2.1 billion in December. This growing interest from institutional investors suggests increasing confidence in Ethereum’s future potential.

Several analysts have pointed to the political and regulatory landscape as factors that could further boost Ethereum’s momentum. A potential Trump administration, they argue, could prove particularly beneficial for Ethereum, as it might lead to the “demise of financial nihilism” and a comprehensive overhaul of the U.S. Securities and Exchange Commission (SEC). These changes could bring increased regulatory clarity to the cryptocurrency sector, which would likely foster greater confidence in assets like Ethereum.

Furthermore, the inclusion of Ethereum staking in ETFs and heightened oversight from the Commodity Futures Trading Commission (CFTC) are also seen as positive developments that could drive more institutional capital toward Ethereum, boosting its long-term prospects.

Looking Ahead: A Stronger Future for Ethereum

As 2024 comes to a close, Ethereum has gained considerable ground in terms of long-term investor sentiment and institutional interest. With increasing confidence in the asset and a growing number of long-term holders, Ethereum appears poised to remain a major player in the cryptocurrency space in 2025. On the other hand, while Bitcoin’s market performance remains strong, its long-term holder base is facing challenges, particularly amid market volatility.

The shift toward Ethereum, coupled with growing institutional interest and positive regulatory developments, sets the stage for a potentially transformative year ahead for the second-largest cryptocurrency. As the digital asset market continues to mature, Ethereum’s ability to attract long-term holders and institutional investors may determine its continued success in the coming years.