ETH stocks on exchanges recently hit a 19-month low, according to Glassnode. Meanwhile, the cryptocurrency rate is flirting with all-time highs.
ETH supply dries up
According to the popular data aggregator Glassnode, the stocks of ETH coins on the leading cryptocurrency exchanges fell to 14.6 million, or about $ 29.5 billion. This data covers such trading platforms as Binance, Bitfinex, Gemini and Kraken.
📉 #Ethereum $ ETH Balance on Exchanges just reached a 19-month low of 14,617,714.148 ETH
View metric:https://t.co/1dCpD2ey8E pic.twitter.com/r6DD8IsC62
— glassnode alerts (@glassnodealerts) April 4, 2021
This is a very noticeable drawdown compared to the end of 2020, which was 19 million. The last time stocks were reduced to such levels in September 2019. After that, the market consistently grew for a long time, although it experienced local ups and downs.
The fact that coins have begun to actively settle in places other than trading platforms suggests that investors expect to benefit more from hodling coins than from selling them. Perhaps they are transferring their Ethereum coins to cold cryptocurrency wallets for long-term storage.
Indeed, institutionalists are showing increased interest in this asset. For example, Grayscale Investments, the fund manager based on the Ethereum Grayscale Ethereum Trust (GETH), has doubled its holdings of Ethereum and ERC-20 coins. Also recently, the blockchain node operator, the startup Staked, announced the creation of a trust for Ethereum staking. Accredited investors became the priority target audience of the new fund.
ETH main drivers
Recently, the main drivers of the growth of interest in the Ethereum network and its more active use have been the boom in such segments of the crypto market as decentralized finance (DeFi) and non-fungible tokens (NFT).
In addition, an update called “Berlin” is scheduled to launch on the Ethereum mainnet on April 14. It will introduce a number of further improvements to the Ethereum Protocol (EIP).
A similar background helped the Ethereum rate renew its all-time high around $ 2,145 on April 2. At the same time, forecasts for the future dynamics of the currency remain optimistic, especially given the launch of the ETH 2.0 network and the imminent implementation of the widely expected EIP-1559 update, aimed at a radical solution to the problem of expensive gas.
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