Ethereum

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	The balance of Ether (ETH) available across cryptocurrency exchanges has reached a five-year low on May 26, with only 17.86 million ETH held on exchanges. This marks the most significant decline in exchange supply since April 2018.
Data from Glassnode reveals that a mere 14.85% of the total <a href="https://crypto.ro/en/cryptocurrencies/ethereum/">Ether</a> supply is currently held on centralized exchanges. This contrasts with the 25-26% of supply held during the 2021 bull run.
<figure id="attachment_21770" aria-describedby="caption-attachment-21770" style="width: 1800px" class="wp-caption alignnone"><img decoding="async" class="wp-image-21770 size-full" src="https://crypto.ro/en/wp-content/uploads/2023/05/The-decline-in-Ether-exchange-balances.webp" alt="The decline in Ether exchange balances" width="1800" height="1013" srcset="https://crypto.ro/en/wp-content/uploads/2023/05/The-decline-in-Ether-exchange-balances.webp 1800w, https://crypto.ro/en/wp-content/uploads/2023/05/The-decline-in-Ether-exchange-balances-300x169.webp 300w, https://crypto.ro/en/wp-content/uploads/2023/05/The-decline-in-Ether-exchange-balances-1024x576.webp 1024w, https://crypto.ro/en/wp-content/uploads/2023/05/The-decline-in-Ether-exchange-balances-768x432.webp 768w, https://crypto.ro/en/wp-content/uploads/2023/05/The-decline-in-Ether-exchange-balances-1536x864.webp 1536w, https://crypto.ro/en/wp-content/uploads/2023/05/The-decline-in-Ether-exchange-balances-750x422.webp 750w, https://crypto.ro/en/wp-content/uploads/2023/05/The-decline-in-Ether-exchange-balances-1140x642.webp 1140w" sizes="(max-width: 1800px) 100vw, 1800px" title="Ethereum exchange balances hit five-year low as ETH supply declines 1"><figcaption id="caption-attachment-21770" class="wp-caption-text">The decline in Ether exchange balances | Glassnode</figcaption></figure>
The decrease in ETH supply on exchanges began in September 2022 and dropped substantially following the FTX crisis in November. Additionally, Ethereum wallet addresses holding over 100 ETH have declined to a six-month low.
<blockquote class="twitter-tweet">
<img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f4c9.png" alt="📉" class="wp-smiley" style="height: 1em; max-height: 1em;" /> <a href="https://twitter.com/hashtag/Ethereum?src=hash&amp;ref_src=twsrc%5Etfw" rel="nofollow noopener" target="_blank">#Ethereum</a> <a href="https://twitter.com/search?q=%24ETH&amp;src=ctag&amp;ref_src=twsrc%5Etfw" rel="nofollow noopener" target="_blank">$ETH</a> Number of Addresses Holding 100+ Coins just reached a 6-month low of 46,858
View metric:<a href="https://t.co/FbjiMG3uFX" rel="nofollow" target="_blank">https://t.co/FbjiMG3uFX</a> <a href="https://t.co/uzHN7H2qRy" rel="nofollow" target="_blank">pic.twitter.com/uzHN7H2qRy</a>
— glassnode alerts (@glassnodealerts) <a href="https://twitter.com/glassnodealerts/status/1659065170335789056?ref_src=twsrc%5Etfw" rel="nofollow noopener" target="_blank">May 18, 2023</a></blockquote>
Two key events may have contributed to the recent decline in ETH balances on centralized exchanges.
First, the collapse of the <a href="https://crypto.ro/en/news/ftx-founder-sam-bankman-fried-fights-legal-battle/">FTX crypto exchange</a> led many users to transfer their crypto assets from exchange wallets to <a href="https://crypto.ro/en/education/ledger-nano-s-plus-review/">self-custody wallets</a>. Second, and most crucially, the Shapella upgrade played a significant role.
The <a href="https://crypto.ro/en/news/everything-you-need-to-know-about-the-ethereum-shapella-hard-fork/">Shapella upgrade</a> allowed thousands of validators to withdraw their staked ETH. Interestingly, only a small portion of validators chose to unstake their assets, while the majority opted to withdraw their staking rewards. This played a pivotal role in the drop of ETH held on exchanges.
The Shapella upgrade introduced significant improvements to Ethereum&#8217;s network, including better scalability and security. As a result, more users were encouraged to stake their ETH, leading to a decrease in the available supply on exchanges.
Furthermore, major crypto exchanges like <a href="https://www.binance.com/" rel="nofollow noopener" target="_blank">Binance</a>, Bitfinex, Kraken, and others that supported the Shapella upgrade experienced a substantial outflow of ETH from their exchange wallets, contributing to the current balance decline.
<figure id="attachment_21771" aria-describedby="caption-attachment-21771" style="width: 1362px" class="wp-caption alignnone"><img decoding="async" class="wp-image-21771 size-full" src="https://crypto.ro/en/wp-content/uploads/2023/05/ETH-withdrawal-from-crypto-exchanges.jpg" alt="ETH withdrawal from crypto" width="1362" height="599" srcset="https://crypto.ro/en/wp-content/uploads/2023/05/ETH-withdrawal-from-crypto-exchanges.jpg 1200w, https://crypto.ro/en/wp-content/uploads/2023/05/ETH-withdrawal-from-crypto-exchanges-300x132.jpg 300w, https://crypto.ro/en/wp-content/uploads/2023/05/ETH-withdrawal-from-crypto-exchanges-1024x450.jpg 1024w, https://crypto.ro/en/wp-content/uploads/2023/05/ETH-withdrawal-from-crypto-exchanges-768x338.jpg 768w, https://crypto.ro/en/wp-content/uploads/2023/05/ETH-withdrawal-from-crypto-exchanges-750x330.jpg 750w, https://crypto.ro/en/wp-content/uploads/2023/05/ETH-withdrawal-from-crypto-exchanges-1140x501.jpg 1140w" sizes="(max-width: 1362px) 100vw, 1362px" title="Ethereum exchange balances hit five-year low as ETH supply declines 2"><figcaption id="caption-attachment-21771" class="wp-caption-text">ETH withdrawal from crypto exchanges | Nansen</figcaption></figure>
In the week following the Shapella upgrade, the amount of ETH being staked exceeded the amount being withdrawn. Glassnode&#8217;s report estimated that less than 1% of staked ETH was expected to be sold. Consequently, a large portion of ETH moving away from centralized exchanges returned to staking, further reducing the supply on exchanges.
This shift of assets away from exchanges is generally seen as a bullish sign, as it indicates that traders are not looking to sell at the current price. In Ethereum&#8217;s case, the re-staking of ETH appears to be the primary reason for the declining exchange supply, reflecting increased confidence in Ethereum&#8217;s long-term potential and the benefits brought by the Shapella upgrade.

Ethereum exchange balances hit five-year low as ETH supply declines

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