Ethereum, the second largest digital coin behind Bitcoin has recently had a significant shift of its “genesis coins.” These coins, minted during the very first stage of the Ethereum development, have sat dormant for almost 10 years. This burgeoning activity follows Ethereum’s near 2% climb in the last month. The market capitalization is still over $306 billion. It remains nearly 48% shy of its all-time record of $4,878 hit in 2021.

The movement, involving $2.2 million in Ethereum, reiterates the continued movement of early investors. These investors purchased tokens when the cryptocurrency was valued at just a few cents. The transaction is just one in a string of six-figure crypto transactions spreading across veteran long-time crypto holders.

From Proof-of-Work to Proof-of-Stake

When Ethereum first started, it functioned on a proof-of-work network, similar to Bitcoin, where new coins were created by miners. In September of 2022, the network completed its long-awaited transition to a proof-of-stake consensus system. This new, energy efficient system lets stakers mint coins through a consensus mechanism that is far less climate-polluting. Many Ethereum tokens were “pre-mined,” meaning that they were already created and distributed to early contributors and developers. These early tokens are what are now called “genesis” coins, denoting the fact that they originated in Ethereum’s very first block.

Whale Activity in the Ethereum Market

According to the definition in Chainalysis’ Whale Accounts report, a whale is an entity that holds at least 10,000 ETH (currently worth $25.3 million). This work comes on the heels of a similar workshop held in April. In April, this Ethereum whale made the sale after holding funds worth nearly $27.6 million for nine years. This sale was guaranteed to yield profits exceeding 18,000%.

The recent transfer of $2.2 million in “genesis coins” into exchanges complicates things even further to the activity of these $$$heavy holders. Market analysts have been closely monitoring the impact of these hefty transactions. They want to get a better sense of the motivations behind and possible effects of this on the Ethereum market.

Implications for the Ethereum Network

The circulation of these previously inactive coins begs the question as to what early investors’ plan is on doing. Are they just seeking to take advantage of long-term capital gains, or is there more strategic rationale for these trades? Their behaviors can have an outsized effect on market sentiment and price volatility.

The behavior of these early investors (and the number of them) is a good indicator of the long-term confidence in Ethereum’s value proposition. As the network matures, so too will the interest in “genesis coins” and whale transactions. This major development will surely be of great interest to the wider cryptocurrency community.