Feb 16, 2023
37% Less ETH on Exchanges Post-Merge
Ether (ETH), the second-largest cryptocurrency by market capitalization, has seen a substantial drop in exchange supply over the past six months following the Merge. The Ethereum network underwent a major upgrade in September 2022, transitioning from a proof-of-work (PoW) to a proof-of-stake (PoS) network in the Merge event.
Crypto analytics firm Santiment has revealed on-chain data which shows a steady decrease in ETH on exchanges since the Merge. In September 2022, before the Merge, there was 19.12 million ETH, worth $31.3 billion, available on exchanges. As of the second week of February, the number has dropped to 13.36 million ETH, worth $19.7 billion.
Ethereum supply on exchanges. Source: Santiment
The majority of the ETH supply is being held in self-custody, and many traders are staking their Ether in anticipation of the upcoming Shanghai upgrade in March. Currently, 16 million ETH, or 14% of the total supply, is staked on the Beacon Chain, amounting to approximately $25 billion at current prices. This amount will gradually become liquid after the Shanghai hard fork.
Related: What’s in and what’s out for Ethereum’s Shanghai upgrade
The deflationary model of Ethereum, implemented through the Ethereum Improvement Proposal (EIP)-1559, has also caused a decrease in ETH’s overall market supply since the London upgrade in August 2021. Since then, a total of 2.9 million ETH has been burned, estimated to be worth $4.5 billion in today’s value.
The decrease in ETH supply on exchanges is a positive sign for the Ethereum network, as it indicates that the demand for ETH is increasing. This is further evidenced by the growing interest in NFTs, which have become increasingly popular in the past year. As more people become interested in NFTs, more investors are turning to Ethereum as a platform for buying, selling, and trading NFTs.
As the Ethereum network continues to grow, many businesses are turning to web3 agencies to help them promote their NFTs and increase their reach. Web3 agencies provide NFT marketing services, such as Twitter NFT marketing and NFT promotion, to help businesses reach a wider audience. By utilizing these services, businesses can increase their chances of selling NFTs and making a profit.
Overall, the Ethereum network is continuing to grow and attract more users, with the decrease in ETH supply on exchanges and the growing popularity of NFTs being two of the main drivers. As more businesses turn to web3 agencies to promote their NFTs, the demand for Ethereum is only expected to increase further.
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