Ethereum Supply Profits Reach 4-Month Low — What’s Behind the Trend?

During the ongoing bull market, several large-cap altcoins have had their share of success, with Solana and XRP emerging as notable leaders. In contrast, Ethereum, often dubbed "the king of altcoins," has not lived up to expectations, underperforming throughout the past year.

Recent on-chain analysis indicates that a significant number of Ethereum investors find themselves at a loss, partly due to the broader market’s recent decline. Below, we’ll explore the current state of Ethereum’s supply in terms of loss and consider its possible implications for the token’s price.

How Profitable Are ETH Tokens Currently?

On February 8th, the on-chain analytics firm Santiment shared insights on the X platform, highlighting that the number of Ethereum tokens that are not profitable has been on the rise. Two key metrics emerged in this context: the "percent of total supply in profit" and the "total supply in profit."

To understand these metrics better, "supply in profit" involves tallying all token amounts that were last moved when their value was below the current market price. Meanwhile, the "percent of total supply in profit" refers to the percentage of the cryptocurrency’s entire supply held at a price exceeding its initial cost. This figure essentially illustrates the relationship between the profitable supply and the total circulating supply.

According to Santiment, Ethereum’s market cap has depreciated by at least 36% since it reached a peak at $4,016 mid-December. This ongoing decline has inevitably decreased the number of profitable ETH tokens since they were first mined.

Source: Santiment/X

Santiment’s data reveals that the volume of Ethereum tokens currently in profit is about 97.7 million, marking its lowest point since November 4, 2024, the night of the U.S. Presidential election win for Trump. Meanwhile, the proportion of the total ETH supply in profit has fallen to 65.5%, the lowest since October 2, 2024, and a significant drop from 97.5% seen in early December.

Santiment pointed out in their commentary:

"The general sentiment towards Ethereum, the second-largest cryptocurrency by market cap, has been largely negative as it hasn’t kept pace with other major cryptocurrencies. However, with significant Fear, Uncertainty, and Doubt (FUD) alongside retail traders offloading their holdings, the market could see unexpected upticks once stability returns."

When only a smaller fraction of a token’s supply is profitable, it tends to mean that steadfast long-term holders dominate the market. Essentially, as retail traders and those influenced by FUD have sold their holdings, the downward pressure diminishes, potentially paving the way for a price rebound.