As Ethereum’s long-anticipated Merge upgrade draws near, a significant on-chain metric has captured the attention of market observers: the number of wallets holding more than 1,000 ETH has surged to a 15-month high. This spike in large holder activity may signal growing confidence in Ethereum’s future—and could foreshadow a bullish price movement following the transition to proof-of-stake (PoS).
The first phase of the Merge was initiated on September 6, with the final execution expected around September 15. As the shift from proof-of-work (PoW) to PoS nears completion, investor sentiment is heating up. Historically, such concentration of large holdings has preceded major price rallies—last seen in May of the previous year.
On September 4 alone, the total number of Ethereum wallet addresses surpassed 200 million. While an increasing address count doesn’t always correlate directly with network activity, it does reflect rising interest and participation in the Ethereum ecosystem.
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Why Are Investors Accumulating Ethereum?
One of the primary drivers behind this accumulation trend is the fundamental shift brought by the Merge. By transitioning from energy-intensive mining to staking-based validation, Ethereum is becoming more sustainable, scalable, and secure. This structural upgrade not only reduces issuance but also enhances the economic model for ETH holders.
However, another compelling factor may be at play: anticipation of a potential PoW fork and associated airdrop. As some miners resist the transition and plan to maintain a proof-of-work chain (commonly referred to as ETHW or ETH PoW), holders with substantial ETH balances stand to receive newly issued tokens on the forked chain.
To qualify for these airdrops, users must hold their ETH before the fork event and retain control of their private keys—prompting many large investors to consolidate holdings and avoid keeping funds on centralized exchanges.
Evidence of this behavior can be seen in the elevated utilization rates of Ethereum within decentralized finance (DeFi) protocols. For example, Aave—a leading DeFi lending platform—has reported exceptionally high borrowing demand, with most available ETH already loaned out. This suggests strong underlying demand for ETH as both a yield-generating asset and a strategic position ahead of network changes.
Market Sentiment and On-Chain Indicators Point Upward
Beyond wallet accumulation, broader market indicators are aligning with a bullish narrative. According to data from blockchain analytics firm Santiment, short positions on Ethereum reached their highest level since June 2021 on August 30. Historically, extreme bearish sentiment—especially when reflected in elevated short interest—has often preceded sharp price reversals.
When too many traders bet against an asset, even modest positive developments can trigger a short squeeze, forcing leveraged sellers to buy back positions at higher prices. Given the timing of the Merge, such a scenario appears increasingly plausible.
Moreover, the long-term implications of the Merge extend beyond immediate speculation. With staking now central to Ethereum’s security model, a growing portion of circulating supply is being locked up in validator contracts. As of now, over 13 million ETH are staked—representing roughly 11% of total supply—and this figure is expected to rise post-Merge.
This reduced liquidity exerts upward pressure on price, especially if demand remains steady or increases. Combined with a slower issuance rate—estimated to drop by over 80% after the upgrade—the network is poised for a deflationary or near-deflationary monetary policy under certain conditions.
What Does This Mean for Ethereum’s Future?
The convergence of technical upgrades, macroeconomic trends, and investor behavior paints a promising picture for Ethereum’s trajectory in late 2025 and beyond. Increased institutional adoption, layer-2 scaling solutions like rollups, and expanding use cases in Web3 and tokenized assets further strengthen its foundational value.
Additionally, the environmental benefits of PoS could attract ESG-focused investors who previously avoided crypto due to energy concerns. This expanded investor base may contribute to sustained demand and broader market resilience.
While past performance is never a guarantee of future results, the current on-chain momentum—marked by whale accumulation, low exchange reserves, and rising staking participation—suggests that confidence in Ethereum’s long-term vision remains robust.
FAQ: Common Questions About Ethereum’s Surge and The Merge
Q: What does it mean when wallets holding 1,000+ ETH increase?
A: It typically indicates that large investors—or "whales"—are accumulating ETH, often signaling confidence in future price appreciation or preparing for events like forks or airdrops.
Q: Will Ethereum become deflationary after The Merge?
A: Under certain network conditions—particularly when base fees are high—Ethereum could experience periods of deflation due to the combination of reduced issuance and ongoing token burning via EIP-1559.
Q: Is staking Ethereum safe after The Merge?
A: Yes, staking is a core function of the upgraded network. However, users should ensure they stake through reputable platforms or run their own validators with proper technical knowledge.
Q: Could a proof-of-work fork affect Ethereum’s price?
A: While an ETH PoW fork may create short-term confusion or volatility, most analysts believe the proof-of-stake chain will retain dominant community support, developer activity, and exchange listings.
Q: How does whale accumulation influence market trends?
A: Large holders often have access to deeper market insights. When they accumulate significantly, it can precede price rallies—as their actions may reflect expectations of upcoming catalysts or improved fundamentals.
Q: Where should I store ETH before The Merge?
A: To maintain full control and potentially receive forked tokens (if any), it’s advisable to hold ETH in non-custodial wallets where you control the private keys.
The surge in large Ethereum holdings is more than just a statistic—it's a behavioral signal rooted in both technical anticipation and strategic positioning. Whether driven by staking incentives, speculative gains, or fork preparations, this accumulation phase underscores growing trust in Ethereum’s evolving role as a cornerstone of decentralized technology.
As the blockchain ecosystem continues to mature, events like The Merge serve not only as technical milestones but also as psychological turning points that reshape investor behavior and market dynamics.
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