Just over 20 million ETH got housed on exchanges. DeFi growth and bullish sentiment towards Ether may play a role in this process.
The amount of Ether that gets housed in cryptocurrency exchanges is declining. This Tuesday, April 19, only 17.2% of the total circulating ETH was on these networks, a percentage that did not get approached since July 2016.
These stats can get confirmed on the Glassnode blockchain data analysis platform. Considering that the current currency of Ether is 120,453,947 units, according to data from CoinMarketCap, then there are 20,718,078 ETH housed in exchanges.
In July 2016, with ETH priced at just $11.32, Ether’s share of exchanges was even lower. More precisely, on July 17 of that year, at least 11.7% of the circulation of digital assets in exchanges got approached.
Many other factors can explain this situation. First of all, the total amount of ETH that existed at that time was much less than it is these days. According to data from Glassnode, on July 17, 2016, there were at least 82,086,488 circulating in the market, so it was enough that 9.6 million were in exchanges to reach a percentage as low as that registered that time.
A Context with Less and Less ETH in Exchanges
On the other hand, in addition to the circulating amount of the digital assets, the market context must also be under study; the ethers in exchanges are less and less, and it is a trend that needs to be studied more to understand it.
There could be various reasons for this ETH leak. Hypotheses such as increased use of decentralized finance (DeFi) protocols and bullish sentiment among traders were debated in-depth in previous reports.
On the first point, DeFi currently brings a less regulated environment to carry out activities related to digital assets, unlike centralized exchanges, which generally request KYC. In addition, these networks also can earn interest with the deposits in them.
Likewise, ETH holders have a bullish sentiment regarding digital assets and market value. Therefore, instead of housing their money in exchanges, with the risks involved in using non-custodial or non-custodial wallets, they leave them in self-custody wallets waiting for the right moment to sell them at a higher price.
Meanwhile, Ethereum 2.0 is Coming
The situation previously explained occurs in a context of high expectations for the arrival of Ethereum 2.0, a new model with which the network will leave the proof of work (popularly known as mining) for the confirmation of transactions and migrate to the evidence of participation. This method got based on validator nodes and consumed fewer energy resources to fund new blocks in the chain.
Although these expectations may be higher than what the change will bring, this seems to affect the market. One sign of this is the actions of ETH holders, who seem to have no intention of parting with their savings in this digital asset.
By: Jenson Nuñez
