May 27, 2023
Ethereum Exchange Balance Drops to Five-Year Low Amid Shapella Upgrade
The amount of Ether held on exchanges dropped to a five-year low on May 26th, with the total amount of Ether held on exchanges now at 17.86 million. This is a drastic decrease from the 25-26% of Ether supply held during the 2021 bull run. According to Glassnode data, only 14.85% of the total Ether supply is currently held on centralized exchanges.
The decline in Ether supply began in September 2022, with a significant drop after the FTX crypto exchange crisis in November. This is not the only indicator of a decrease in Ether on exchanges, as Ethereum wallet addresses holding more than 100 ETH have also dropped to a six-month low.
Two events could have played a part in the decline of Ether on centralized exchanges. The first is the collapse of the FTX crypto exchange, prompting many to move their crypto assets from exchange wallets to self-custody wallets. The second, and most likely, is the Shapella upgrade. This upgrade allowed thousands of validators to withdraw their staked ETH, though only a minority of validators decided to unstake, with the majority withdrawing their staking rewards.
The movement of assets away from exchanges is often seen as a bullish sign, as it suggests traders are not looking to sell at the current price. In Ethereum’s case, re-staking ETH is the likely reason for the declining exchange supply. Major crypto exchanges such as Binance, Bitfinex, Kraken and others that supported the Shapella upgrade saw a significant outflow of ETH from their exchange wallets, leading to the current balance decline.
Glassnode estimated that less than 1% of staked ETH was expected to be sold, and in the week after the Shapella upgrade, the amount of ETH being staked surpassed the amount of ETH being withdrawn. This indicates that a significant chunk of ETH moving away from centralized exchanges has returned to staking.
The decrease in Ether supply on exchanges is a trend that could continue in the near future, as the Ethereum community continues to focus on NFTs, DeFi, and other web3 products. This could lead to an increase in demand for NFT marketing, crypto marketing, and web3 marketing services, as well as an increased need for NFT promotion and Twitter NFT marketing. This could lead to a need for more NFT marketing agencies and web3 agencies, as well as more efficient ways of selling NFTs.Disclaimer: All investment or financial opinions expressed by MoonLanding Media are not recommendations and are intended for entertainment purposes only. Do your own research prior to making any kind of investment. This article has been generated based on trending topics, has not been fact checked and may contain incorrect information. Please verify all information before relying on it.