Centralized exchanges’ ETH balances are rapidly diminishing
- Ethereum supply on centralized exchanges is rapidly reducing, currently sitting at 13.3 million ETH.
- This amount is the lowest that CEXes have seen in the last two years.
- It is likely that many are expressing this behavior due to surging ETH prices, as well as its uses in DeFi.
Centralized cryptocurrency exchanges are rapidly losing their Ethereum (ETH) supply, according to recent data from analytics provider, Glassnode. In fact, Glassnode data indicates that the amount of Ethereum still on exchanges is at its lowest in the last two years.
These days, only around 13.3 million ETH currently still sits on CEXes, meaning that they hold around $52.4 billion in Ethereum, which also translates to around 11.5% of Ethereum’s entire supply.
Why is Ethereum’s supply on exchanges dropping?
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One interesting thing regarding this recent data is that it is a consequence of the events that took place over the last 9 months, or so. In fact, during that period, CEXes lost approximately 30% of their Ether supply, right after peaking in September 2020 at 19 million ETH.
However, this is not considered to be bad development. In fact, the lower amount of ETH on exchanges, the more bullish the market is considered to be, indicating that there is great demand, and that users tend to hold on to their coins. Essentially, investors are locking up their funds in secure storages, and are choosing to avoid trades, meaning that they expect the coin’s price to skyrocket.
Of course, it is also likely that a lot of Ether has ended up locked away in DeFi protocols for the purposes of staking, earning yields, lending, and other services that DeFi has to offer.
On top of that, Glassnode also reported that there has been a certain reduction in exposure to BTC in favor of ETH. It should also be noted that Ethereum’s on-chain activity has increased by quite a bit during the past month, which is also the period when Ether saw extremely bullish performance.