Ethereum holdings on crypto exchanges decline

While Ethereum holdings on crypto exchanges are bottoming out, the amount of ETH tied up in smart contracts is rising to a record high.

More and more Ethereum-investors are withdrawing their ETH holdings from major crypto exchanges such as Binance and Coinbase. As a result, Ethereum holdings on these platforms have reached levels last seen in 2016. This phenomenon is occurring at a time when the price of Ethereum is noticeably rising.

Source: Glassnode

Despite these price increases, investors are remarkably cautious when it comes to realizing gains. This reticence strongly suggests that many of them are betting on a continuation of the upward trend. It is a sign that in the eyes of many investors, Ethereum is no longer just a short-term speculative asset, but is increasingly seen as a long-term investment.

Record high of ETH in smart contracts

For a holistic understanding of the Ethereum offering, it is crucial to look beyond the Ether available on centralized crypto exchanges. The amount of ETH in smart contracts is also of particular interest. This consists of the Ether used in staking processes and in various decentralized Ethereum applications.

Source: Glassnode

A new high was reached in November: more than 33 percent of all ETH is now locked into smart contracts. This further reduces the amount of ETH in circulation. Combined with the already declining availability of ETH on exchanges, a true supply shock is looming. If this is met with increased demand, such as through ETF purchases, the price of ETH could rise.