A Federal Reserve Bank of Philadelphia working paper found that public notifications of large cryptocurrency transfers trigger sharply different trading patterns on Bitcoin and Ethereum networks.
The study matched Whale Alert notifications with on-chain transfers through the end of 2025, examining 6,645 Bitcoin whale transactions and 5,075 Ethereum whale transactions. Researchers defined whale wallets as those making transfers exceeding $50 million, excluding addresses associated with exchanges or smart contracts.
Bitcoin Shows Rapid Response
Non-whale Bitcoin wallets became active most strongly in the first 15 minutes following whale alerts. Small and medium-sized Bitcoin wallets showed the most pronounced same-direction trading: buy participation increased by 14.81 and 23.72 percentage points respectively for small and medium wallets after whale buys, while sell participation rose by 12.95 and 29.52 points following whale sells. This activity then subsided toward normal levels within an hour.
Large non-whale Bitcoin wallets showed more modest responses of 3.50 and 2.95 percentage points for buys and sells respectively.
Ethereum Activity Remains Stable
Ethereum participation stayed comparatively stable across most wallet groups following alerts. The clearest immediate response appeared among the largest non-whale sellers, while medium-sized Ethereum sellers showed only weaker statistical significance.
Whale alerts were associated with temporary increases in Bitcoin volatility at short time horizons, though these effects reversed by 24 hours. Ethereum realized volatility was lower after alerts, suggesting large Ethereum transfers tend to occur during periods of declining volatility.
Market Structure Differences
The authors attribute the divergent responses to structural differences between the networks. Ethereum activity frequently routes through exchanges, smart contracts, and layer-2 venues where multiple user transactions aggregate into larger balance transfers, creating a different visibility pattern. This contrast persisted after Ethereum's September 2022 shift to proof of stake.
The researchers note their findings establish patterns in wallet activity around alerts rather than proving the alerts directly caused observed trading responses.
