ETH Token Profit: Current Numbers and Future Outlook

In the context of the cryptocurrency market experiencing a growth cycle, many altcoins such as Solana and XRP have seen exceptional growth. However, Ethereum – the "king of altcoins" – has not kept up, as the price of ETH has significantly dropped over the past year. This has led many ETH investors into an "underwater" state, according to on-chain data, raising the question: what is the current profit from ETH tokens, and what is the future outlook? Token Profit Indicators: Two Key Metrics According to a report from Santiment – a leading on-chain analytics service – there are two important metrics used to evaluate the "profit" of ETH tokens: Total Supply in Profit: This refers to the total amount of tokens accumulated during transactions where the purchase price is lower than the current price. Specifically, all ETH purchases are calculated based on the transaction price at that time and compared with the current price. If the current price is higher, those tokens are counted as being in profit. Percentage of Total Supply in Profit: This metric shows the percentage of the total circulating ETH supply that is in profit . It reflects the market’s psychological health and the level of pressure from investors who bought ETH at higher prices. ETH’s Current Situation: Notable Numbers A report from Santiment shared on X on August 2nd, during a period of significant market correction, revealed that the number of profitable tokens and the percentage of profit had dropped to record lows: Total Supply in Profit: Approximately 97.7 million tokens, the lowest since April 11, 2024 – the day marked as “Trump’s Victory Day” in the US presidential election. Percentage of Total Supply in Profit: Only around 65.5%, a significant decrease from 97.5% in early December. This is the lowest level recorded since February 10, 2024. These figures indicate that the value of ETH has been on a continuous decline since reaching a high of $4,016 in mid-December, causing most previous ETH purchases to no longer be profitable. This means many investors are facing pressure from having bought ETH at higher prices compared to the current market value. Causes and Impacts The sharp decline in the profit of ETH tokens can be explained by several factors: Selling Pressure from “FUD” and Retail Traders: The spread of negative news has caused many investors to sell their tokens, reducing the percentage of tokens in profit. This happens when sell transactions occur at prices lower than the initial purchase price. Effect of Long-Term Holders: Despite many tokens being "underwater," the market remains supported by long-term investors. These investors typically buy and hold ETH for extended periods and are not greatly affected by short-term volatility. This shaping effect creates a “floor price” for ETH, helping to reduce sell pressure and possibly supporting a recovery when the market stabilizes. Pressure from Other Altcoins: While altcoins like Solana and XRP have experienced impressive growth, ETH has struggled to generate similar growth. The competition from these altcoins has led investors to shift their investments, further weakening ETH’s value and reducing the percentage of profitable tokens. Future Outlook: A Chance for Recovery Although current data may seem discouraging, there are signs that ETH might have a chance to recover: Reduced Sell Pressure: As most retail traders and those influenced by “FUD” leave the market, the selling pressure will gradually decrease. This creates the potential for a period of stability and price recovery for ETH. Strength from Long-Term Community: Long-term investors, who believe in the technology and future of Ethereum, continue to hold their positions, creating a price "floor." When the market stabilizes, the amount of ETH held by these investors could become a driving force for price increases. Ethereum Network Development and Application: With the transition to Ethereum 2.0, along with the growing applications in DeFi, NFTs, and smart contracts, Ethereum’s infrastructure remains highly valued. This could lead to a new wave of investments, improving the profit rates of ETH tokens. Conclusion Data from Santiment shows that currently only about 65.5% of the total ETH supply is in profit, with 97.7 million tokens in profit – the lowest in recent months. This decline reflects selling pressure from retail investors and FUD, as well as strong competition from other altcoins. However, with support from long-term investors and the continuous progress of Ethereum’s technology, the market still has the potential to recover once it stabilizes. In the ever-volatile cryptocurrency market, investors need to carefully weigh the risks and opportunities. An intelligent and insightful analysis of on-chain data can help them make the clearest and most informed decisions during any market fluctuation. #CryptoForBeginners #CryptoInvestingTips #LearnCrypto #BeginnerCryptoGuide #HowToInvestInCrypto