90% Of ETH Are In Self-Custody As Users Move Assets Off Exchanges – Data
According to recent reports, the upcoming Shanghai upgrade has reduced the circulating supply of Ethereum, the second-largest cryptocurrency behind Bitcoin. The total supply of this crypto has decreased by more than 66,000 ETH since the beginning of 2023, implying a deflationary trend.
Only 10.31% Of Ethereum Are On Crypto Exchanges
The latest data from on-chain analytics provider Santiment revealed that the percentage of existing ETH held on exchanges stands at a mere 10.31%, marking the lowest level observed since July 2015. The latest figures indicate that about 90% of Ethereum is now held off exchanges.
Experts opine that this recent occurrence is due to regulators’ difficulty in classifying ETH as a commodity or security. Also, the amount of ETH held in self-custody and away from exchanges has reached a record high in the past months.
The recent collapse of crypto exchanges such as FTX and crypto lending platforms has forced crypto holders to move their assets off exchanges. Besides, Ethereum’s supply percentage was at its lowest since its inception almost eight years ago. According to Santiment:
“The ratio of ETH held on exchanges has reached an all-time low of 10.31%. This suggests that the level of confidence among Ethereum holders has dropped.”
Meanwhile, investors’ growing preference for holding Ethereum tokens in personal wallets rather than on crypto exchanges has increased self-custody. Rising concerns about the security of exchanges like FTX have driven this shift in behavior.
Additionally, the recurrent hacks and thefts recorded in crypto have changed the crypto landscape. Investors would rather keep their assets themselves than leave them on exchange.
Increased Demand For Ethereum Pushes Price Up
The growing trend of self-custody in Ethereum is further fueled by the increasing popularity of DeFi protocols that operate on the Ethereum blockchain. These protocols allow users to trade, lend, and borrow cryptocurrencies without intermediaries like banks.
As a result, there has been a surge in demand for Ethereum as investors look to participate in these innovative options, notably staking. With the growing trend of self-custody and the increasing demand for Ethereum, many investors consider Ethereum a viable long-term investment option, similar to Bitcoin.
This is shown in the growing confidence of holders holding onto their Ethereum for the long run instead of trading it on crypto exchanges. In addition to the rising trend of self-custody, the low percentage of ETH held on exchanges suggests a significant buying pattern.
The ongoing accumulation of Ethereum by holders reduces its supply on exchanges, causing an increase in the cryptocurrency’s price.
Current data shows that Ethereum is trading above $1,700 as long-term investors moved their tokens to private wallets.
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