It's not a bad idea to stay abreast of what deep-pocketed investors are doing. When they are actively buying an asset, there could be an underlying reason that could make it worthwhile for you to buy as well. The same idea applies when wealthy investors are selling a given asset.
I bring this up because there have been several reports recently about Ethereum (ETH 2.00%) whales selling Shiba Inu (SHIB 3.85%). Some have speculated that these whales could be losing interest in or becoming more bearish about the meme coin.
But are Ethereum whales really giving up on Shiba Inu? I don't think so.
Image source: Getty Images.
Why whales would consider bailing
We'd have to be living underneath a rock to ignore the possibility that Ethereum whales at least might be throwing in the towel on Shiba Inu. Just look at a chart of the digital token's recent performance.
Shiba Inu is down roughly 30% over the past month. It has fallen close to 50% so far this year. And the plunge of more than 80% from the peak in late October is downright ugly.
Keep in mind that Shiba Inu has performed so dismally even with several positive developments for the token. Robinhood finally added Shiba Inu to its trading platform. AMC began accepting online payments with the digital token. Shiba Inu began selling virtual land in its metaverse.
These catalysts still haven't been enough to provide a sustained uptrend for Shiba Inu. You really couldn't blame Ethereum whales if they did choose to give up on the beleaguered meme coin.
Understanding the context
To be sure, the top Ethereum whales don't own as much of Shiba Inu as they have in the past. Whalestats.com tracks the top wallets on the Ethereum blockchain. As of early March, Ethereum whales owned more than $1.5 billion of Shiba Inu. Today, the total has declined to around $824 million.
But would be a mistake to conclude that Ethereum whales are giving up on Shiba Inu, in particular. Actually, the biggest investors appear to like Shiba Inu more than any other cryptocurrency these days. Ethereum whales now hold more SHIB tokens than any token other than Ether, according to Whalestats. Back in February, that honor belonged to FTX (FTT).
The whales have divested much more of FTX over the past few months than they have of Shiba Inu. In early March, the top Ethereum investors owned more than $1.6 billion of FTX. Today, that total has been more than cut in half to around $744 million. During the same period, top Ethereum whales have slashed their positions in Decentraland (MANA 2.08%) by more than 60%.
On the other hand, deep-pocketed Ethereum wallets have increased their stakes in stablecoin Tether (USDT 0.03%) in recent months. What we're seeing happen is the same phenomenon that's taking place in the stock market. Investors are shifting at least some of their money from more aggressive assets into more conservative assets.
But that doesn't mean that whales have given up on Shiba Inu. There are nearly 824 million reasons to think otherwise.
