Bitcoin and Ethereum Exchange Balances at 4-Year Low. Bitcoin and Ethereum Balances Plunge to Levels Not Seen Since 2020. According to the latest data released by Glassnode, user balances of Bitcoin (BTC) and Ether (ETH) haven’t stood this low for four years, and investors wait for a rise in prices in a bull market.
Why Bitcoin and Ethereum Exchange Levels Dropped
The amount of BTC and ETH on exchanges has been in a downtrend since before July 2020, per Glassnode. Data confirmed that users continued to withdraw assets from these platforms following the pandemic, through the previous 2021 peak, during the 2022 Terra-FTX contagion, and even after spot BTC ETFs were approved.
Four-Year Pattern
This suggests that crypto users have a bullish long-term view that they express confidence in the future appreciation of the crypto assets, regardless of the market cycle.
COVID-19 Crisis and Inflation on Bitcoin and Ethereum
The world is facing the COVID-19 crisis, and, for a second, the effects of inflation rocked world economies, thus motivating investors to station their capital in technologically sound vehicles. When its hard-capped supply was bundled with its immutable design, it solidified its standing as a hedge against inflation. Other sovereign nations, like El Salvador, embraced cryptocurrency as legal tender, too.
Institutional Demand and Bullish Thesis
This is further emboldened by the bullish thesis stating that giant Wall Street behemoths, such as BlackRock and Fidelity, continuously increase institutional demand with spot BTC ETFs. Other companies have also followed suit, such as MicroStrategy under BTC maxi Michael Saylor, in parking billions in the top digital asset. As the second-biggest crypto and top altcoin asset, ETH has its bullish thesis, too: it is the leading substitute for Bitcoin and Ethereum. The token is said to power the most prominent decentralized finance (Defi) ecosystem worth nearly $70 billion, as stated by DefiLlama.
Ethereum’s Transition and Staking
In 2020, they launched Beacon Chain, which started the process of the long-planned transition from proof of work (PoW) to proof of stake (PoS). With it came the potential to unlock Ether staking, the ability to lock up Ether for network security and passive yield. Over 27% of Ethereum’s supply had been staked by press time. It is for comparison’s sake that users have deposited more than $119 billion worth of ETH into these staking providers, including Coinbase, Lido, and EigenLayer. All these came together with the noise about spot ETH ETF approvals, growth in defi, and rising staking, with a view to the positive outlook that the cryptocurrency encourages many more to practice holding on for dear life, as the term “hold” is in the crypto community.
