Bitcoin Wallets Decline as Small Traders Exit, Signaling Potential Whale Accumulation

Bitcoin’s network is seeing a notable decline in non-empty wallets.

According to Santiment data from Feb. 13, Bitcoin (BTC) has lost approximately 277,240 active wallets over the past three weeks and has fallen to 52.45 million, marking a five-month low.

Analysts suggest that the primary driver behind this decline is the exodus of small traders from the market, spurred by fears of further price drops across the crypto space. As sentiment weakens among retail investors, larger holders – often referred to as “whales” and “sharks” – are likely accumulating Bitcoin at lower prices.

📊 Even with cryptocurrencies like Ethereum and XRP continuing to see their networks grow with more and more wallets, the same is not true for Bitcoin. Crypto's top cap has 277.24K LESS non-empty wallets than it did 3 weeks ago.

The decline appears to be primarily due to small… pic.twitter.com/V2rJWDnaY9

— Santiment (@santimentfeed) February 12, 2025

Retail Sell-Off and Institutional Outflows

On Jan. 20, when Bitcoin reached its all-time high of $109,000, the network boasted over 52.56 million such wallets.

However, retail investors are now liquidating their holdings, fearing further price drops, while institutional outflows from US spot Bitcoin exchange-traded funds (ETFs) have intensified the selling pressure.

The latest data from SoSoValue shows that on Feb. 12, Bitcoin ETFs recorded over $251 million in net outflows – the third consecutive day of negative flows.

A Historically Bullish Signal?

While a drop in active wallets might seem like a negative indicator, historical patterns suggest it could actually be a bullish sign for Bitcoin’s mid- to long-term price trajectory.

When retail investors exit the market due to Fear, Uncertainty, and Doubt (FUD), large institutional players often step in, using their capital to accumulate Bitcoin at lower valuations.

IntoTheBlock data shows that on Feb. 5, whales accumulated approximately 39,620 Bitcoin, worth $3.79 billion, when Bitcoin briefly traded below $97,600.

Ethereum Network Continues to Grow

While Bitcoin wallets are on the decline, Ethereum (ETH) network activity is on the rise.

The number of active Ethereum wallets has grown significantly, from approximately 367,000 on Sept. 24 to over 526,100 on Feb. 12, marking over 43% increase over this period.

Meanwhile, the number of new Ethereum wallets has also surged. On Sept. 25, over 80,800 new wallets were created, climbing to around 121,300 on Feb. 12 – a 50.1% increase.