Dai Shark & Whale Holdings Growing, Dry Powder for Bitcoin?
On-chain data shows that Dai sharks and whales have increased their holdings recently, which could fuel Bitcoin’s rally.
Dai Sharks & Whales has bought 6.4% of its supply in the last six weeks
According to data from the analysis company at the chain Sentiment, stocks of Dai whales and sharks had plunged to rock bottom last month. The relevant indicator here is “DAI Supply Distribution”, which tells us the percentage of the total circulating supply of stablecoin that each market wallet group holds.
Addresses are divided into these wallet groups based on the number of coins they have in their balance. For example, the 100 to 1000 coins cohort includes all addresses that contain at least 100 and 1000 tokens of the stablecoin.
If the supply distribution metric is applied to this group, it will measure what percentage of the supply the combined balances of wallets satisfying this condition make up.
In the context of the current topic, the bands of interest are 100,000 to 1 million coins and 1 million to 10 million coins. Here is a chart showing the trend in supply distribution for these two groups over the past few months:
The values of the two metrics seem to have been rapidly going up in recent days | Source: Santiment on Twitter
The first of these ranges ($100,000 to $1 million) corresponds to a Dai cohort called the “sharks,” while the latter ($1 million to $10 million) represents the wallets of the “whales.”
These investors’ wallets have such large amounts that they can play an important role in the market. Naturally, whales’ stocks are larger than sharks’, so they are the most powerful group.
Investors usually use stablecoins like DAI to escape the volatility associated with the other assets in the market. Such investors usually hold their stall until they feel the timing is right to re-enter volatile coins like Bitcoin and Ethereum. At this point, they convert their stables into them, thus giving a bullish boost to prices.
The chart shows that the percentage of the total circulating Dai supply of the sharks and whales fell in March when BTC fell below the $20,000 level. Soon after these investors dumped their holdings, BTC’s price started to climb again.
This suggests that the sharks and whales of this stablecoin moved their coins to BTC while the cryptocurrency was trading around relatively low levels, thus helping it recover.
In the six weeks since then, these massive investors have once again accumulated stablecoin, adding around 6.4% of the circulating supply to the wallet. While the shark stocks are currently less than they were before the bottom, the whale’s treasury has recovered and completely surpasses the stocks of the past.
Recently, Bitcoin’s price has dropped to the low level of $27,000. It remains to be seen if the Dai sharks and whales convert their accumulated stacks here to take advantage of the downturn and help the cryptocurrency recover, just like a month.
BTC price
At the time of writing, Bitcoin is trading around $27,300, down 7% in the last week.
BTC has sharply gone down | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, Charts from TradingView.com, Santiment.net
