Ethereum and Bitcoin balances on exchanges approach 5-year low

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The amount of Ethereum on centralized exchanges has nearly hit its lowest level in five years, according to data from Glassnode.

With 17.8 million ETH on exchanges, the sum represents 14.85% of the network’s total token supply.

Although significant, it is significantly lower than the maximum value of 30% reached in the summer of 2020.

Volatile cryptocurrencies, like Bitcoin and Ethereum, leaving centralized exchanges are sometimes seen as bullish sentiment among investors. Conversely, an influx of cryptocurrencies to be exchanged is considered bearish, as it suggests that investors are turning to these platforms to sell some of their holdings.

Ethereum balance on exchanges. Source: Glassnode.

Bitcoin stats show much the same, with the balance on cryptocurrency exchanges dropping to levels not seen since March 2018, just above 2.23 million BTC.

Why are investors leaving the stock exchanges?

A closer look at the data reveals that the majority of the decline occurred in November and December 2022 after FTX collapsed. Glassnode’s stacked balance metric, which shows the individual balance on each exchange, confirms that a significant portion of the decline is coming from FTX.

An exodus soon followed from other major exchanges such as Binance, Kraken, and Coinbase, likely due to contagion fears spreading through the market. This was also seen in the surge in sales of hardware wallet providers such as Ledger and Trezor.

Crypto Cold Wallets in Ledger, Trezor Sales Moon after FTX Collapse

The latest drop in Ethereum balances on exchanges in May also coincides with an increase in staking. The amount of ETH staked increased from 19.3 million before the Shapella upgrade to 21.2 million, increasing vertically since early May, according to data from Nansen.

The Bitcoin exchange balance did not decline alongside ETH during the same period, further suggesting that staking played a role in exchange withdrawals.

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