Philadelphia Fed finds Bitcoin traders follow whale signals faster than Ethereum users

A Federal Reserve Bank of Philadelphia working paper published this month found that public notifications of large crypto transfers were followed by sharply different trading activity on Bitcoin and Ethereum.

Non-whale Bitcoin wallets became active and traded in the alerted whale's direction most strongly during the first 15 minutes. Ethereum participation, by contrast, remained comparatively stable.

The Philadelphia Fed working paper matched public Whale Alert notification times with on-chain Bitcoin, Ethereum and Wrapped Bitcoin transfers through the end of 2025.

Wrapped Bitcoin, or WBTC, was observed on Ethereum. The authors defined a whale wallet as one that had made at least one transfer worth more than $50 million, excluding large wallets associated with exchanges or smart contracts. Keeping only events without another whale transaction within two hours on either side left 6,645 BTC and 5,075 ETH whale transactions.

The raw data showed active non-whale Bitcoin participation rising most among small and medium wallet groups in the first 15 minutes after an alert. In full-sample regressions, buy participation increased by 14.81 percentage points for small wallets, 23.72 points for medium wallets and 3.50 points for large wallets after whale buys. Following whale sells, sell participation rose by 12.95, 29.52 and 2.95 points, respectively. The same-direction activity then waned toward normal within an hour.

Ethereum did not show the same broad response. Post-alert participation stayed comparatively stable across wallet groups. The clearest immediate same-direction result appeared among the largest non-whale cohort after whale sells, while medium ETH sellers reached only the study's weaker 10% significance threshold. Those classifications describe wallet activity rather than the identities of the people or organizations controlling the addresses.

The volatility results also split by network. Whale alerts were associated with a temporary rise in realized Bitcoin volatility at short horizons. By 24 hours, the effect on BTC volatility from BTC and ETH alerts had reversed, while the response to WBTC alerts was statistically indistinguishable from zero. Ethereum realized volatility was lower after alerts, leading the authors to say large Ethereum-network transfers tended to occur during periods of declining volatility.

The authors interpret the gap as a market-structure difference. Ethereum activity often runs through exchanges, smart contracts and layer-2 venues, where many user transactions can be aggregated into larger balance transfers. The contrast persisted across Ethereum's September 2022 shift to proof of stake, weighing against consensus design alone as the explanation.

The evidence remains observational. Wallet-size groups are transaction-based proxies, one owner may control multiple addresses, and exchange activity was excluded. The event study establishes patterns in wallet activity and volatility around public alerts, not that the alerts caused every observed response.

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