Ethereum Makes History: More ETH Staked Than Held on Crypto Exchanges

The world’s second-largest cryptocurrency Ethereum (ETH) continues to trade above $1850 levels with a market cap of $233 billion. Analysts have been trying to anticipate what could be the next move for the ETH price.

Let’s take a look at the on-chain data which can put some light on this matter. The ETH supply at the exchanges has recently touched a new all-time low. Considering the regulatory developments taking place in the crypto market, the uncertainties at Binance/Coinbase, and other things, investors have been moving coins off the exchanges.

A large number of Ethereum investors seem to have self-managed their ETH or invest it in other staking services. For the very first time, the total number of Ethereum staked has surpassed the amount of ETH held on the exchanges. This change could have a major change in the dynamics of the ETH price action going ahead.

With the decreasing number of ETH on the centralized exchange, the supply is becoming more scarce. Thus, if the demand for ETH remains the same or increases further, it could lead to positive buying pressure on the cryptocurrency.

On the other hand, the percentage of ETH in smart contracts has increased sharply. At the beginning of 2023, the total ETH percentage in smart contracts was around 26 percent. This number has now shot up to 31 percent.

Courtesy: Glassnode

As the amount of ETH locked up in long-term smart contracts increases, it indicates a decrease in the availability of ETH for active trading.

Ethereum Staking Outperforms Exchange Reserves

As per data from crypto analytics platform Nansen, approximately 23.81 million ETH, equivalent to about $44.39 billion, are being staked, whereas only 23.36 million ETH, valued at $43.55 billion, are held on centralized crypto exchanges.

Surprisingly, both numbers make up about 20 percent of all ETH in existence. To put it in perspective: At the start of the year, there was over 40 percent more ETH on exchanges compared to what was being staked. This significant change clearly shows how the Ethereum market dynamics have shifted.

As a result, the amount of ETH held on exchanges has decreased by approximately 20 percent this year, which is about 5.1 million ETH or $9.51 billion. At the same time, the amount of ETH being staked has increased by a third, which is equivalent to 5.9 million ETH or nearly $11.1 billion.

While more investors have been withdrawing ETH from exchanges, non-exchange addresses have continued to accumulate on the other hand. On-chain data provider Santiment reported:

Ethereum is volatile today as #bulls and #bears battle around $1,900. The largest non-exchange addresses, in the meantime, continue getting richer while the top exchange addresses are near genesis levels. $ETH supply on exchanges is down to 9.2%.

Coming to the Ethereum (ETH) price, it is currently trading above $1,850 levels. For the ETH price to make big gains, it should break past $2,000 convincingly.