Ethereum Shifting to Cold Wallets for DeFi-Related & Holding Activities

This quarter has been rewarding to Ethereum (ETH) because it is now an asset with a market capitalization of more than $500 billion. Continued adoption has played an instrumental role in enabling Ethereum’s value to rise because it is one of the sought-after networks in the non-fungible token (NFT) and decentralized finance (DeFi) sectors.

Furthermore, ETH supply on exchanges has been shrinking, which has been pivotal in Ethereum’s price rally. Crypto analytic firm Santiment acknowledged:

“Ethereum’s supply on exchanges sits at 15.66%. One year ago, this number sat at 23.29%. It’s clear that more and more ETH is moving safely to cold wallets for DeFi-related activity and hodling, an encouraging sign for long-term price prospects.”


Market insight provider Glassnode echoed these sentiments and noted that ETH balance on exchanges dropped to a 3-year low. 


Investments in Ethereum 2.0 continue going parabolic

According to Glassnode:

“Total value in the ETH 2.0 deposit contract just reached an ATH of 8,240,450 ETH.”

Ethereum 2.0, also known as the Beacon Chain, was launched in December 2020 and was regarded as a game-changer that sought to transit the current proof-of-work (POW) consensus mechanism to a proof-of-stake (POS) framework.

The proof-of-stake algorithm allows the confirmation of blocks to be more energy-efficient and requires validators to stake Ether instead of solving a cryptographic puzzle. As a result, it is touted to be more environmentally friendly and cost-effective. ETH 2.0 is also expected to improve scalability through sharding.

Meanwhile, ETH mining difficulty recently reached record highs.

The Ethereum mining difficulty measures how many hashes in statistical terms must be generated to find an effective solution to solve the next ETH block and earn the mining reward.

With this metric reaching record highs, the Ethereum supply is expected to continue being depleted because it is becoming harder to generate more coins. 

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A Large Portion of Bitcoin Supply Stores in Cold Storage Based on the Bottoming Out of Dormant BTC Supply

Bitcoin (BTC) was up by 2.05% in the last 24 hours to hit $44,907 during intraday trading after briefly nosediving below $40K on September 22, a fate not seen since August 5.

Glassnode acknowledged that a large portion of Bitcoin supply was stored in cold storage. The on-chain metrics provider explained:

“The Bitcoin supply that has been dormant for at least 1yr is starting to bottom out at 54.2%. Compared to the 2017 top, this indicates that a larger relative proportion of BTC remains in cold storage.”


Therefore, more Bitcoin supply being kept in cold storage signifies a holding culture. This is bullish because investments are held for future purposes other than speculation.

Holding is a favoured strategy in the Bitcoin market, with long-term holders and crypto whales leading the race. 

For instance, Bitcoin supply has been steadily maturing to old hands, given that nearly 2 million BTC have transitioned from short-term to long-term holders from the time an ATH price of $64.8K was attained in mid-April.

Meanwhile, the Bitcoin Lightning Network has been gaining steam because it recently hit an all-time high (ATH) capacity of 2,738 BTC. This is a second layer incorporated into the Bitcoin blockchain to undertake off-chain transactions. As a result, micropayment channels are utilized to scale the blockchain’s capacity to carry out transactions more efficiently.

On-chain analyst Will Clemente acknowledged the Lightning Network growth was crucial for Bitcoin to eventually transit from primarily being used as a store of value to a medium of exchange. 

Is the journey towards $50K still open?

According to market analyst Michael van de Poppe:

“Bitcoin is looking at resistance, but showing a great daily candle. A breakout above $44.6K and a path to $50K is open. If we correct, then I’m looking around the $42K region for support.”


Earlier this month, BTC breached the psychological price of $50K and scaled to the $52,000 level. Nevertheless, the leading cryptocurrency experienced a significant pullback that prompted a $10K loss as over-leverage factors dominated.

Furthermore, Bitcoin’s quest to retest the $50K zone was recently dented by a significant liquidity challenge experienced by China Evergrande, a leading Asian property developer. This development is one of the factors that made Bitcoin briefly drop below the psychological price of $40K. 

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Samsung Adds Support For Hardware Wallets On Galaxy Devices

Samsung Electronics has added new support assets for blockchain users with hardware wallets this week. The move will impact mobile Galaxy owners, allowing them to use third-party hardware wallets with the Samsung Blockchain Wallet app. In their press release, Samsung has sought out to explicitly provide hardware support for Ledger Nano S and Nano X. The company stated, however, that they plan to support more cold-storage wallets moving forward.

Samsung Blockchain

The journey to initiate hardware support, of course, started with straightforward blockchain integration. In 2019, Samsung released Samsung Blockchain and dedicated crypto wallet support, without extensive fanfare. The company rolled out the blockchain software in tandem with the Galaxy S10 release. A major focal point for the blockchain offering is the included software development kit. The kit opened the door for Samsung to support developers in creating decentralized apps. Dapp support is driven through the Blockchain Keystore SDK.

Of course, the other major emphasis of the Samsung Blockchain is security. This comes by way of the company’s self-described ‘Samsung Knox’ and ‘Trusted Execution Environment (TEE)’. Knox is a secure holding space for crypto users that is separate from the main operating system, accessible only via PIN or biometric authentication. Knox is essentially a “secure processor dedicated to protecting your PIN, password, pattern, and Blockchain Private Key”, as the company describes it.

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Related Reading | Cardano Turning Down Dapps Due To Sheer Volume Of Applications

Galaxy Support

The update to begin supporting cold-storage wallets will be applicable for Galaxy users running Android 9.0 and above. The company also cautioned that in the initial roll-out, Nano X bluetooth features may be limited.

The Korean-based firm continues to keep promotional activity around new blockchain-related features somewhat under the radar, despite continuous and evolving support.

BTC's consistency has given more companies good reason to integrate | Source: BTC-USD on

Continued Crypto Support

Samsung has continued to release crypto-related support with a relatively quiet approach. In 2020, the firm partnered with crypto exchange Gemini to streamline Galaxy users consumer experience. The company continues to offer consumer and developer assets, such as a dedicated crypto newsfeed available in the Blockchain Wallet app. For developers in particular, offerings include extensive resources, such as APIs that allow dapps to securely sign for transfers of virtual assets.

After initially support ethereum in 2019, and adding bitcoin shortly thereafter, the company now offers over thirty coins, including stablecoins. Samsung continues to stay relatively quiet despite what seems to be continued investment. In a public statement, head of blockchain and company VP Woong Ah Yoon stated that monthly active users of the blockchain app have doubled over the past seven months. Without sharing hard figures, Yoon added the smartphone wallet is currently used to hold hundreds of millions of USD in AUM (assets under management).

Related Reading | Go Phish: How This Bitcoin Investor Lost 17 BTC To An iPhone App

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Metaco partners with IBM for secure digital asset orchestration system

Digital asset security infrastructure outfit Metaco has partnered with tech conglomerate IBM to utilize the latter’s cloud platform for enterprise-grade digital asset custody solutions.

According to a press statement issued on Thursday, Metaco will leverage IBM Cloud and IBM Cloud Hyper Protect Services for its digital asset orchestration system.

The goal of the partnership is to provide adequate digital asset custodial services for banks and other highly regulated financial services firms looking to participate in the digital asset ecosystem across use cases like tokenization, custody, and transaction management among others.

As part of the announcement, Metaco will reportedly utilize IBM’s confidential computing and “Keep Your Own Key”, or KYOK, encryption to ensure that the firm’s clients retain sole access to their private keys. The press statement also revealed that clients will be able to run the asset orchestration system on-site or on the cloud or via a hybrid cloud environment.

For Metaco, robust security-critical protocols like KYOK are necessary to protect client information while mitigating the risks posed by hackers.

Commenting on the IBM collaboration, Metaco CEO Adrien Treccani remarked that the collaboration will enable the company deliver greater levels of security for their clients as they create products and services in the digital asset space.

In a conversation with Cointelegraph, Seamus Donaghue, vice president of  strategic alliances at Metaco highlighted the ways in which the digital asset orchestration system will help banks and other financial services firms comply with regulatory requirements, stating:

“The fiduciary obligations of asset managers require them to externalise custody to regulated custodians. Our multi-custodian solution enables them – with a single integration into their core infrastructure – to seamlessly manage and diversify risk across multiple custodians all under a holistic risk and control framework.”

According to Donaghue, the company’s offering also provides the added advantage of efficient transfers of digital assets from secure lockups. “The orchestration can be parameterized to leverage trusted address books and the secure workflow automation to facilitate instant but secure movements as required. In this manner, a firm can be confident that its assets are always safe but can respond to rapidly moving markets,” the Metaco executive added to Cointelegraph.

Back in December 2020, Donaghue remarked that regulatory clarity for cryptocurrencies was enabling greater institutional involvement in the asset space.

Indeed, 2020 saw significant inroads being made by banks and other financial services firms into cryptocurrencies especially in the area of custody.