ETH Supply on Exchanges Hits 9-Year Low Amid ETF and Treasury Buying

• Exchange balances for Ethereum have fallen to 14.8 million ETH after $11.3 billion worth, 2.7 million ETH, was withdrawn over a month.
• U.S. ETH ETFs have attracted growing inflows, now holding 6.75 million ETH worth nearly $28 billion.

For the first time in almost ten years, Ethereum’s (ETH) presence on exchanges has fallen back to 2016 levels. With only 14.8 million ETH left on trading platforms, this is a change in how holders view the asset’s future. This decline isn’t new.

This drop began in mid-2020, and in the past two years alone, the available ETH on exchanges has been cut by about half. According to Glassnode, Ethereum’s exchange net position change registered a negative 2.18 million ETH, a level that has only been recorded five other times in the past ten years. This has pushed the total balance on exchanges down to 14.8 million ETH.

CryptoQuant paints a similar picture. Its data shows that the 30-day moving average of ETH flows just reached its highest point since late 2022, while the share of ETH sitting on exchanges has sunk to just 14% of the total supply.

ETFs and Treasuries Drive Accumulation

This drawdown in ETH comes as Exchange-Traded Funds (ETFs) and corporate treasuries ramp up their purchases. Over the past few months, millions of ETH have shifted into long-term holdings, with spot ETFs accounting for a large share of that accumulation.

Ethereum outflows from exchanges have picked up pace since June, when corporate treasuries like BitMine, Coinbase, and SharpLink Gaming, now holding more than 3% of all ETH, began aggressively buying in. Data from StrategicEthReserve shows that since April, roughly 68 organizations have acquired 5.26 million ETH, valued at about $21.7 billion, equal to 4.3% of the total supply, which is 120.7 million ETH.

That said, spot Ethereum ETFs have only brought in about $110 million in net inflows, a steep drop compared to the $3.8 billion they accumulated in August. The mechanics are simple: when ETH is parked on exchanges, it’s more liquid and more likely to be sold. But once it’s moved into staking contracts, DeFi protocols, or cold storage, it tightens supply on the open market.

A shrinking pool of liquid ETH means less immediate selling pressure. If demand holds steady or rises, that reduction in available supply can create upward pressure on price. At the same time, Ethereum’s staking model and attractive yields give holders even more incentive to take their coins off exchanges and lock them up for the long haul, rather than leaving them idle.

Ethereum slipped below $4,000 earlier today. The sharp drop triggered a wave of liquidations, but it also created buying opportunities, with ten newly created wallets scooping up 201,000 ETH worth roughly $855 million.

At the time of writing, ETH is hovering near $4,011, down 12.85% on the week and another 3% in the past 24 hours, sitting about 18% below its all-time high of $4,953 from Aug. 25.

Crypto strategist Ted weighed in, noting,