ETH exchange holdings continue to decline

The availability of ETH tokens on exchanges is shrinking by the week. More and more Ethereum tokens are being moved to external wallets.

Data from the blockchain analytics company Glassnode, shows that there are fewer and fewer Ethereum tokens on exchanges. This indicates that Ethereum investors are transferring their tokens to self-managed wallets, and using them for DeFi applications. Since April last year, about seven million ETH have been moved from Binance, Coinbase and other exchanges. Since mid-January this year, the trend has accelerated again, as the Glassnode chart shows.

The reason is probably the bullish trend on Ethereum layer 2 tokens, as well as the current rise of restaking via EigenLayer.

Market observers are optimistic about Ethereum's decline in exchange holdings. This is because the less a cryptocurrency is held on centralized exchanges, the less likely it is to be sold "quickly.

Looking at the supply dynamics of Ethereum, it is also clear that there is less and less Ether available. Especially as the number of burned tokens increases and more and more ETH is tied up in smart contracts.