Last week, users withdrew ETH from the exchanges with a total value of $ 1.6 billion. According to the analyst, cryptoassets could be moved to DeFi protocols, and also blocked for staking in ETH 2.0.
According to records Glassnode on Twitter, the ETH balance on the largest cryptocurrency exchanges at the end of last week hit a 15-month low of 15.4 million ETH (about $ 20.5 billion). The withdrawal of cryptoassets began on January 19 – then there were about 16.6 million ETH on the exchanges. This means that in a few days ETH worth about $ 1.6 billion was withdrawn from the exchanges.
According to the Whale Alert service, most of the coins were transferred from major cryptocurrency exchanges to anonymous wallets. Quantum Economics analyst Pedro Febrero said there are three reasons why so much ETH has been pulled off exchanges.
First, he suggested that users have started blocking ETH on DeFi protocols again. However, according to DeFi Pulse data, the number of ETH blocked in DeFi protocols actually decreased from 7 million coins on Tuesday to 6.9 million on Wednesday, and then rose again to 7 million. At best, this explains the movement of 0.1 million ETH.
Febrero also suggested that “the number of ETH blocked for staking in Ethereum 2.0 has grown by over 320% since December 2020.”
On January 19, 170,000 ETH were blocked in Ethereum 2.0, and another 200,000 coins were blocked on January 20. This represents about a third of ETH withdrawn from exchanges. And although the number of ETH blocked for staking began to decline by Thursday, the withdrawal of the cryptoasset from exchanges continued.
Febrero also suggested that institutional investors such as Grayscale investors accumulate ETH. However, according to the BYBT website, Grayscale did not buy more ETH for its public trusts.
The fate of the rest of the withdrawn from the ETH exchanges is difficult to determine. Perhaps retail investors have started moving cryptoassets from exchanges to their wallets.
“In our opinion, the withdrawal of ether from exchanges means that the price of a crypto asset has more chances of growth. The less ETH is available on exchanges, the higher the likelihood of the price going up, ”said Febrero.
Last week, the ETH rate renewed its all-time high, rising to $ 1,440, but could not stay at this level. Ether broke the record again last night, reaching $ 1,475, but has since declined slightly and is now trading at $ 1,419.
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