Glassnode, the world-renowned crypto analytics service, has issued important Ethereum data projections in the middle of the altcoin rally season. According to this thought-provoking data, the aggregate concentration of Ethereum available on exchanges has dropped dramatically low since June 2019. This slow but consistent drop in Ethereum could be traced back to Bitcoin reserves.
As reported by Glassnode, long-term investors seem to be transferring their crypto stashes to cold storage wallets. These wallets are meant for secluded placement of crypto reserves so that the investors can keep earning yield for a long duration with the help of DeFi protocols or staking. The data also suggests that Bitcoin investors have been converting their Bitcoin into Ether since May 2021.
Is the Dwindling Ethereum Supply a Good Sign for HODLers?
The shortage of supply is directly proportional to the increase in price. Given the latest blockchain updates, Ethereum ETFs, EIB bonds, and upcoming PoW merger, the demand for the silver cryptocurrency has increased exponentially in the market. Glassnode has projected that about 30% of Ethereum supply has been reduced on exchanges in the last nine months.
The number of ETH 2.0 tokens has reduced from 19 million to a small bracket of 13.3 million on the centralized exchanges. At present, these mainstream centralized exchanges hold about $52.4 billion worth of Ethereum that makes up for 11.5 percent of the entire Ethereum volume. On the other hand, Ethereum Classic, ETC, has also gained 400% in seven days at the start of May 2021.
The opinion for Ethereum’s long overdue dominance in the crypto market is still disputed in the marketplace. A week on Chain- a crypto reporting publication, issued data suggesting that Bitcoin exposure has been shifting to the Ethereum. Glassnode also endorsed this data by claiming that it is possible considering the six months and three years long term positions on crypto that Bitcoin investors have been liquidating their reserves to grow richer in Ethereum.
Joshua Frank, CEO at TIE, told crypto journalists last week that Ethereum might not be the leading coin of the crypto markets, but many investors consider it the crown prince of the altcoins. He was referring to the effect of the recent social media bombardment of the silver cryptocurrency. He shared with the media that as the ETH has scored a new ATH, the tweet volume has increased to 59,000, which is ideal for creating more demand in the crypto community.
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