Ethereum Balance on Exchanges Drops to Lowest Levels Since 2018

Recently, the total cryptocurrency market capitalization managed to top $2 trillion. This valuation, which was last seen during April 2021 when a large number of digital assets were trading at all-time highs, is an indication that the digital asset market is back on track to reclaim lost territories. 

Part of the reason for the recent recovery is a renewed wave of accumulation. Ethereum, whose price has gained more than 60% over the last 30 days, is being aggressively accumulated by both small and fat-purse addresses. 

Data acquired from Glassnode reveals that Ethereum balances on centralized crypto exchanges have reached their lowest levels since 2018.

Ethereum in Accumulation 

The second-largest cryptocurrency by market cap, Ethereum, has been experiencing a mass exodus from cryptocurrency exchanges. Just recently, Ethereum balance on exchanges hit a multi-year low, according to data by leading blockchain analysis firm Glassnode. 

Currently, there is just over 15 million Ether available on exchanges, which accounts for around 13 percent of Ethereum’s circulating supply. Further squeezing the available supply, more miners are now reluctant to sell their coins. This can be established using the exchange inflow volume, which has just reached a one-month low of around $4,518,850.

Further, the number of ETH addresses with over 1,000 coins has recently reached a 3-month high of 6,422. This is evidence that investors are back on accumulation after a period of extreme sell-off during May. 

A number of factors have contributed to the notable decline in ETH supply available on exchanges. For one, the total number of Ethereum staked on ETH 2.0 has reached an ATH of 6,837,922. As reported by The Tokenist, by July, over $12 billion worth of ETH was staked on Ethereum 2.0.

In addition, the much-anticipated London Hardfork upgrade has finally launched. As part of this update, EIP-1559, which redesigns Ethereum’s fee mechanism also went live. Maintained in this new structure, a portion of the Ethereum fee is burned every time the Ethereum network is used. 

This further creates a shortage in the issuance of new ETH tokens. For perspective, in the first 24 hours of the update, around 4,700 Ether were burned. While Ethereum is yet to become a deflationary asset, the shortage in supply can already be felt.

Analysts Are Bullish on Ethereum

Courtesy of a dedicated developers team, Ethereum has managed to become one of the most popular cryptocurrencies in the world. In the last week of June, Ethereum managed to surpass Bitcoin in terms of daily active addresses. 

Prior to this, Ethereum managed to exceed Bitcoin in terms of transaction count and transaction volume, according to The Flippening Index. More recently, Ethereum even exceeded Bitcoin in trading volume, recording a new milestone. 

All this spectacular outperformance has led numerous analysts to claim that the “Flippening” might eventually take place. In July, the leading global bank Goldman Sachs asserted that Ethereum could beat Bitcoin and become the dominant store of value. The bank said:

“[Ether] currently looks like the cryptocurrency with the highest real use potential as Ethereum, the platform on which it is the native digital currency, is the most popular development platform for smart contract applications.”

Just yesterday, CEO of deVere Group Nigel Green predicted that Ethereum would surpass Bitcoin by 2026. Geen said Ethereum’s real-life use cases along with its ever-improving ecosystem are the two main drivers of its growth. He stated:

“There will be peaks and troughs along the way of course, but Ethereum’s ascent to the top of the cryptoverse seems unstoppable.”

Moreover, a recent survey by the leading crypto exchange Gemini reveals that Ethereum is the most popular cryptocurrency in Singapore. Around 78% of the respondents who took part in the survey said they hold Ethereum while 69% held Bitcoin. 

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Do you think the shortage of ETH balance on crypto exchanges will push Etheruem’s price to new all-time highs? Let us know in the comments below.