Ether holdings on centralized exchanges have dropped to their lowest point since 2016, driven by growing institutional accumulation.
Exchange balances have been steadily shrinking since mid-2020, with the available supply of Ether (ETH) cut by around 50% over the past two years.
The ETH exchange exodus accelerated in mid-July, with balances dropping 20% since then as digital asset treasuries ramped up accumulation. As of Thursday, the exchange balance is down to 14.8 million ETH, according to Glassnode.
CryptoQuant reports a similar trend with its Ethereum exchange supply ratio, which measures the exchange reserve divided by the total supply, at 0.14 — its lowest level since July 2016.
When exchange supplies fall, it is usually a sign that the asset is being moved into cold storage, staking or into DeFi for greater yields. When exchange balances increase, it is often a sign that investors are preparing to sell.
Net outflows are increasing
CryptoQuant data also revealed that the 30-day moving average of total Ethereum exchange net flows reached its highest level since late 2022 this week, indicating an acceleration in flows.
“Large-scale withdrawals often indicate a shift toward self-custody or DeFi deployments, reducing exchange liquidity and immediate selling pressure,” commented CryptoQuant author CryptoOnchain.
Meanwhile, Glassnode’s exchange net position change showed a negative 2.18 million ETH on Wednesday. It has only been higher than this five times over the past decade.
Exchange net position change tops -2 million ETH. Source: GlassnodeDigital asset treasuries accumulate more Ether
Exchange outflows have accelerated since corporate Ether treasuries such as Tom Lee-chaired BitMine, which now holds over 2% of the total supply, started aggressively accumulating the asset in June.
Since April, around 68 entities have scooped up 5.26 million ETH worth around $21.7 billion and representing 4.3% of the entire supply, according to StrategicEthReserve.
The vast majority of them are staking the asset for additional yields and not holding it on exchanges.
Related: ETH price euphoria fades, but $5K remains the end-of-year target: Analyst
Over the same period, US spot Ether exchange-traded funds have also seen increased inflows. These now total 6.75 million ETH worth almost $28 billion, equating to 5.6% of the total supply.
This means that around 10% of all ETH in existence has gone to institutional entities, with accumulation accelerating over the past few months.
Institutional Ether accumulation ramped up in July. Source: StrategicEthReserveAnalyst calls it “Wall Street glow-up”
BTC Markets analyst Rachael Lucas said on X that Ethereum was getting “the Wall Street glow-up.”
Ether prices have fallen back, however, retreating more than 11% over the past week and falling below $4,100 on Thursday morning.
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Source: https://cointelegraph.com/news/ethereum-balance-exchanges-hits-9-year-low-what-it-means?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
