Ethereum Longs Reach Stratosphere, Nearing 2% of Total Supply

An incredible amount of eth is currently betting long on just one exchange, Bitfinex, sending it far beyond previous all time highs as can be seen above.

An astonishing one million eth has been added this spring, accounting for some 1% of the total supply and double the whole previous longing amount, sending it all above 1.6 million of eth in total now betting the price will rise.

Quite curiously these longs seem to be added in bursts. The first one being about ◊200,000 on the 12 of March, that being Black Thursday after Milan was curfewed.

Then a bit is added on the 19th of March, the following Thursday, with a huge addition following on the 10th of April of 400,000 eth and then precisely a month later on the 10th of May.

Shorts in contrast are not quite playing. Just ◊125,000, a far more normal amount. Likewise the longs and shorts of the other two big cryptos appear to be acting quite more naturally.

That makes these eth longs a bit suspicious as a lot of dollars are buying eth on margin in the hope price increases, with that eth then eventually sold to lock in the price difference, and so hopefully gaining from the trade.

Presumably then that means Bitfinex needs to have 1.6 million eth. Unless these are CME like futures where real eth doesn’t actually exchange, making them contracts for difference (CfDs).

CfDs are very strictly regulated because one can easily see the potential abuse as there is no real anchor to any of CfD contracts save for spot price at best.

These could well be proper margins however where eth is actually ‘exchanged’ because quite interestingly Bitfinex has somehow risen to be the very top holder of eth:

The very first one suggests just under half of Bitfinex’s deposited eth is now being used to long.

Those are not necessarily all of Bitfinex’s deposited eth as shown by the fact the address has a number 2.

There are some eight such addresses going by memory, but scrolling through it appears they may have largely consolidated them as the next know Bitfinex biggest holding address is at just around 50,000 eth.

So suggesting this exchange has risen to be maybe even the biggest player, and their influence is becoming… well hopefully not systemic, but it doesn’t sound like it is very far from it.

They have some sort of partnership with Blockstream with it unclear just what exactly is the relationship between the two, but what is known is Bitfinex pays Blockstream a monthly fee for the usage of the Liquid permissioned blockchain, and Blockstream assisted Bitfinex in investigating a hack that occurred around three years ago.

Bitfinex also pretty much runs tether, with that making them potentially pretty much a bank.

They do not appear to follow any national regulations, which might be an attraction for some, and their trading engine is actually pretty good.

They’ve been running since 2013, with the exchange going through a lot of ‘this is fine’ moments but clearly they have survived and now they’re maybe even thriving.

They do not appear to be very responsive to the media, however, although their accessibility is a lot better than it used to be.

And we suspect they report these longs or shorts data about maybe five days after the trade has actually occurred, which would be useful for them to confirm it, but in traditional exchanges and even plenty of crypto exchanges they don’t report these data at all.

So it’s a curious exchange. That’s perhaps the best way to put it. Bit punky, bit shifty, and still rolling. It does play at the edges, and as long as it can avoid being cut, then long may it play.

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