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Bitcoin and Ethereum user balances have dropped to levels not seen since 2020. 
Glassnode data revealed that user balances of Bitcoin (<a href="https://crypto.news/price/bitcoin/" rel="">BTC</a>) and Ether (<a href="https://crypto.news/price/bitcoin/" rel="">ETH</a>) on centralized exchanges reached a four-year low as investors held out for higher prices in a bull market.&nbsp; 
BTC balances dipped to below 2.3 million coins, valued at around $160 billion, while ETH balances have dropped below 16 million, amounting to less than $59 billion. 
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 Bitcoin and Ethereum exchange balance at 4-year low | Source: <a href="https://studio.glassnode.com/metrics?a=BTC&amp;m=distribution.BalanceExchanges&amp;s=1570361904&amp;source=content_type%3Areact%7Cfirst_level_url%3Aarticle%7Csection%3Amain_content%7Cbutton%3Abody_link&amp;u=1587222400&amp;zoom=" target="_blank" rel="">Glassnode</a>
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<h2 class="wp-block-heading" id="why-bitcoin-and-ethereum-exchange-levels-dropped">Why Bitcoin and Ethereum exchange levels dropped</h2> 
The amount of BTC and ETH on exchanges has been in a downtrend since before July 2020, per Glassnode.&nbsp;Data confirmed that users continued to withdraw assets from these platforms following the pandemic, through the previous 2021 peak, during the 2022 Terra-FTX contagion, and even after spot BTC ETFs were approved.&nbsp; 
The four-year pattern suggests that crypto users have adopted a bullish long-term outlook, expressing confidence in the future appreciation of these assets regardless of market cycles.&nbsp; 
After the COVID-19 crisis in 2020, inflation also rocked world economies and incentivized investors to station capital in technologically sound vehicles. Bitcoin’s hard-capped supply and immutable design bolstered its status as an inflation hedge and sovereign nations like <a href="https://crypto.news/?s=El+Salvador" rel="">El Salvador</a> have adopted the cryptocurrency as legal tender. 
 You might also like: <a href="https://crypto.news/bitcoin-etfs-see-inflows-despite-market-fluctuations/" rel=""> Bitcoin ETFs see significant inflows despite market fluctuations </a> 
The bullish thesis is perhaps solidified even further as Wall Street behemoths like <a href="https://crypto.news/?s=BlackRock" rel="">BlackRock</a> and Fidelity drove institutional demand through spot <a href="https://crypto.news/?s=bitcoin+etf" rel="">BTC ETFs</a>. Companies like <a href="https://crypto.news/?s=MicroStrategy" rel="">MicroStrategy</a> under BTC maxi Michael Saylor have also parked billions in the top digital asset.&nbsp; 
As the second-largest crypto and top altcoin asset, ETH commands its own bullish thesis as the leading substitute for BTC. The token powers the biggest decentralized finance (defi) ecosystem worth nearly $70 billion per DefiLlama.&nbsp; 
In 2020, developers launched the Beacon chain, which kicked off the eventual transition from proof-of-work (PoW) to proof-of-stake (PoS). The move unlocked Ether <a href="https://crypto.news/?s=staking" rel="">staking</a>, a process of locking up ETH for network security and passive yield.&nbsp; 
At press time, over 27% of Ethereum’s supply was staked. In other words, users have deposited over $119 billion worth of ETH in staking providers like <a href="https://crypto.news/?s=Coinbase" rel="">Coinbase</a>, Lido, and <a href="https://crypto.news/?s=EigenLayer" rel="">EigenLayer</a>.&nbsp; 
The hype around spot ETH ETF approvals, defi growth, and staking surges has culminated in a positive outlook for the cryptocurrency and has further encouraged users to hold on for dear life, otherwise known in the crypto community as “hodl.” 
 Read more: <a href="https://crypto.news/ethereum-outlook-remains-bullish-etf-approval-retreat/" rel=""> Ethereum price retreats after ETF approval surge, but long-term outlook remains bullish </a>

Bitcoin, Ethereum exchange balances at 4-year low

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