For the first time ever, the proportion of addresses with a holding period of more than a year owning Ethereum has surpassed that of Bitcoin, reaching a level not seen since at least 2018.
The percentage of long-term owners in Ethereum staking has surpassed Bitcoin’s, and the network is producing more “hodlers” than ever before.
At about 72% of all ETH holders, the statistics reveal that addresses with more than 12 months of ownership have the most ETH, a metric referred to as the “Hodler Ratio” by IntoTheBlock. This level of ownership has not been seen since at least October 2018.
After breaking through in August, Ethereum’s “Hodler Ratio” finally caught up to Bitcoin’s in October. The vitality of a Layer 1 chain depends on investors who can see it through to the end. Because they are less prone to sell in reaction to short-term market changes, so-called “hodlers” provide stability and reduce market volatility.
Despite an uptick in Bitcoin’s long-term investors, Ethereum has been able to best Bitcoin “hodlers” in recent times. According to Glassnode, the spread between Bitcoin’s long-term and short-term holders is at an all-time high in the ecosystem.
Staking incentives on the Ethereum network encourage users to hang on to and eventually mine more of the chain’s native currency, ETH.
“The growth in staking this year is most likely related to the increase [of long-term holders],” said Lucas Outumuro, head of research at IntoTheBlock.
According to Outumuro, the quantity of Ethereum being staked has increased by about 100% in 2023, reaching 24% of the total supply. According to him, the “Hodler Ratio” is elevated since, on average, the funds stored there are more than a year old.
For Ethereum, the current yearly staking rewards rate is 4.39%, as reported on stakingrewards.com. The rate is the same as the “risk-free” rate on the network, which is like the yield on a 10-year US Treasury note.
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