Cracking Ethereum’s Supply Puzzle: Untangling Exchanges and Stakes

Decrease in Ethereum Supply on Exchanges

The supply of Ethereum on exchanges has witnessed a gradual reduction since the beginning of the year. According to AMBCrypto’s analysis, the exchange supply of Ethereum decreased from around 10.52 million to 10.45 million at the time of writing, representing a decline of over 8% to about 7.9%. This decline indicates that holders are withdrawing their Ethereum assets from exchanges. The destination of these assets remains uncertain, but it could potentially lead to increased scarcity in the market.

Impact of Decreasing Supply on Ethereum Holders

The decreasing supply of Ethereum on exchanges has implications for the number of holders of the cryptocurrency. As holders withdraw their assets from exchanges, it could suggest increased confidence in the long-term value and potential of Ethereum. This trend may also indicate a shift towards holding Ethereum outside of exchanges, which may contribute to the overall scarcity of the asset.

Exchanges Experience Decline in Ethereum Supply

The decrease in Ethereum supply on exchanges is evident in the data analyzed by AMBCrypto. At the beginning of the year, the exchange supply stood at around 10.52 million. However, as of now, it has decreased to approximately 10.45 million. This decline suggests that holders are actively withdrawing their Ethereum assets from exchanges, potentially for reasons such as long-term investment or participation in other activities like staking.

More Ethereum Staked or Withheld from Exchanges?

While the overall growth in Ethereum staking suggests that some of the ETH withdrawn from exchanges is being staked, a closer look at the daily new stake numbers challenges this assumption. The data indicates a decline in new deposits, dropping below 2,000 after the 30th of December 2022, and falling below 1,000 at the time of writing. This trend suggests that not all Ethereum withdrawn from exchanges has been staked, at least not in its entirety and for the present period.

Sustained Growth in Ethereum Holders Despite Decreasing Supply on Exchanges

Despite the decreasing supply of Ethereum on exchanges, the number of Ethereum holders continues to increase. AMBCrypto’s analysis shows sustained growth in the number of Ethereum holders over recent months, with the count approaching 112 million at the time of writing. This upward trend in the number of holders affirms the ongoing expansion of Ethereum’s user base. Additionally, the supply of Ethereum outside of exchanges, which currently stands at over 120 million, indicates that the decreasing supply on exchanges may be attributed to accumulation by holders.

In conclusion, the supply of Ethereum on exchanges has continued to decrease in the new year, indicating a trend of holders withdrawing their assets. This declining supply has implications for the number of Ethereum holders and may contribute to increased scarcity. While some of the withdrawn assets have been staked, not all of them have been, suggesting that holders may be withholding their Ethereum for various reasons. Despite the decreasing supply on exchanges, the number of Ethereum holders has shown sustained growth, highlighting the ongoing expansion of Ethereum’s user base.