Ethereum Supply on Exchanges Falls Below Bitcoin

• Recent Glassnode data reveals that Ethereum’s exchange balance has officially dipped below Bitcoin’s, marking a significant shift in crypto market dynamics.

• The latest chart shows ETH supply on centralized exchanges has fallen to roughly 10%, while Bitcoin hovers around 14%—a reversal of the historical pattern where Ethereum was typically more liquid on exchanges.

• The data shows a steady decline in ETH reserves since 2022, with BTC following a more gradual downward trend. During this period, ETH’s price has ranged between $3,000 and $4,500, indicating that shrinking exchange balances haven’t triggered major sell-offs—typically a positive sign for long-term holders.

• Several factors explain Ethereum’s declining exchange presence. After the Shanghai upgrade, staking has locked up over 30 million ETH, pulling it out of active circulation. Additionally, ETH’s deflationary mechanics through EIP-1559 fee burns have slowed supply growth.

• While this reduces selling pressure and increases scarcity, it also pushes liquidity off exchanges—which could amplify price swings during sudden demand surges.

• Analysts see this as evidence of maturing investor behavior, with holders choosing staking, DeFi participation, or self-custody over keeping assets on exchanges. This shift reflects a broader industry move toward yield generation and decentralization rather than quick trading.

• This milestone highlights Ethereum’s transformation from a speculative token to core Web3 infrastructure. With both ETH and BTC exchange supplies declining, the crypto market is entering a phase of tighter liquid supply—potentially fueling stronger bull market rallies.

• If this trend continues, analysts anticipate a supply squeeze, especially as institutional staking adoption grows and potential ETH ETF approvals loom. The data suggests Ethereum’s scarcity narrative is just getting started—and it’s now outpacing Bitcoin.

---

Source: CryptoGoos