The quantity of Ethereum stored on centralized crypto exchanges has plummeted to the lowest level since 2016 as institutional accumulation rises.
The volume of Ether (ETH) on exchanges has been decreasing since mid-2020. In the past two years, the ETH supply on exchanges has been halved.
This trend accelerated in mid-July, with a 20% decline since then, driven by aggressive accumulation from digital asset treasuries. As of Thursday, the total has dropped to 14.8 million ETH, according to Glassnode.
CryptoQuant reports a similar pattern in its Ethereum exchange supply ratio, which measures the reserve on exchanges relative to total supply, now at 0.14 — its lowest since July 2016.
When the supply on exchanges decreases, it often indicates that the asset is being transferred to cold storage, staked, or placed in DeFi for higher yields. Conversely, an increase in exchange balances usually suggests that investors are gearing up to sell.
Net outflows are escalating
CryptoQuant data also showed that the 30-day moving average for total Ethereum exchange net flows reached its peak since late 2022 this week, signaling a surge in outflows.
“Large withdrawals typically point to a transition toward self-custody or DeFi initiatives, which diminishes exchange liquidity and immediate selling pressure,” commented CryptoQuant author CryptoOnchain.
Meanwhile, Glassnode’s exchange net position change indicated a negative 2.18 million ETH on Wednesday, a figure surpassed only five times in the past decade.
Digital asset treasuries increase Ether holdings
Outflows from exchanges have accelerated since corporate Ether treasuries like BitMine, chaired by Tom Lee, began significant accumulation in June, now holding over 2% of the total supply.
Since April, around 68 entities have acquired 5.26 million ETH valued at approximately $21.7 billion, representing 4.3% of the total supply, according to StrategicEthReserve.
The vast majority are staking the asset for added yields instead of keeping it on exchanges.
Related: ETH price optimism wanes, but $5K target remains: Analyst
During the same period, US spot Ether exchange-traded funds have seen increased inflows, now totaling 6.75 million ETH worth nearly $28 billion, equivalent to 5.6% of the total supply.
This indicates that about 10% of all ETH in circulation has been allocated to institutional entities, with accumulation ramping up in recent months.
Analyst describes it as a “Wall Street glow-up”
BTC Markets analyst Rachael Lucas stated on X that Ethereum is experiencing “the Wall Street glow-up.”
“Treasuries are accumulating ETH, exchange supply hits a nine-year low, and Tom Lee projects $10K to $15K by year-end.”
Ether prices, however, have declined more than 11% over the past week, dropping below $4,100 on Thursday morning.
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