Ethereum, Bitcoin Balances on Exchanges Edges Toward 5‑Year Low

The amount of Ethereum on cen­tral­ized exchanges has near­ly hit a five-year low, per data from Glassnode.

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

Though large, it’s sig­nif­i­cant­ly less than the peak val­ue of 30% reached in the sum­mer of 2020.

Volatile cryp­tocur­ren­cies, like Bit­coin and Ethereum, leav­ing cen­tral­ized exchanges are some­times seen as a bull­ish sen­ti­ment among investors. Con­verse­ly, an influx of cryp­tocur­ren­cies to exchange is viewed as bear­ish, as it sug­gests that investors are mov­ing to these plat­forms to sell off some of their holdings.

Bit­coin’s stats show much of the same, with the cryptocurrency’s exchange bal­ance drop­ping to lev­els not seen since March 2018 at just above 2.23 mil­lion BTC.

Why are investors leaving exchanges?

A clos­er look at the data reveals that the major­i­ty of the decline came in Novem­ber and Decem­ber 2022 fol­low­ing the FTX col­lapse. The stacked bal­ance met­ric from Glassnode, which shows the indi­vid­ual bal­ance on each exchange, con­firms that a sig­nif­i­cant por­tion of the decline came from FTX.

An exo­dus fol­lowed short­ly across oth­er major exchanges such as Binance, Krak­en, and Coin­base like­ly due to the con­ta­gion fears that spread across the mar­ket. This was also seen in the steep spike in sales for hard­ware wal­let providers such as Ledger and Trezor.

The lat­est decline in Ethereum bal­ances on exchanges in May also coin­cides with a rise in stak­ing. The amount of staked ETH surged from 19.3 mil­lion before the Shapel­la upgrade to 21.2 mil­lion, ris­ing ver­ti­cal­ly since the start of May, per Nansen data.

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