Ether (ETH) balances on centralized platforms plunge to their lowest in two years as demand continues to rise

Ether (ETH), the native crypto on the Ethereum platform, recently set a new record when it traded above $4,000 this month. With the rise in demand for the crypto, ETH balances on exchanges have likewise fallen to their lowest levels since mid-2019.

On-chain analytics firm Glassnode estimates that there is 13.3 million Ether (ETH) being held on centralized exchanges, according to Cointelegraph. This is the lowest level of supply for the crypto since June 2019.

This means that the value of ETH being held by centralized platforms is around $53.1 billion based on Ether’s price of $3,996 on Coinmarketcap at the time of writing. The 13.3 million ETH tokens account for 11.5 percent of Ethereum’s total supply.

The figure also represents a 30 percent decrease in ETH supply on centralized platforms in nine months. The crypto’s supply peaked in September 2020, when 19 million ETHs were being kept on exchanges.

Decreasing Ethereum supply is indicative of bullish market sentiment as it means that demand is outpacing supply on these crypto exchanges. It could also suggest that long-term investors are locking their cryptos through DeFi protocols or staking to earn yields or have simply taken them out of circulation into cold storage.

Glassnode’s earlier report noted that ETH is the main beneficiary in the recent capital rotation where investors decreased their Bitcoin exposure in favor of Ether. This resulted in the almost doubling of ETH’s price and helped it establish a new all-time high this month.

“Whilst this is only an empirical observation (correlation <> causation), the distinct increase in these older BTC being spent back into circulation after a prolonged period of holding makes a compelling case,” Glassnode wrote. “ETH prices have almost doubled in this time from $2,200 to an ATH of $4,000.

The firm also a significant increase in activity on the Ethereum platform in the weeks leading to its recent rally. “The chain has seen a strong uptick across the board of many metrics including total number of smart contract calls, uniswap transactions, total transaction rate, and USD settled in ETH transfers, just to name a few,” Glassnode added.

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