FameEX Hot Topics | Ethereum Supply on Exchanges Hits 9-Year Low as Wall Street Rally Continues

Ethereum’s exchange balances have reached a significant milestone, dropping to a nine-year low of 14.8 million ETH. This decline is attributed to a surge in buying activity from digital asset treasury firms and exchange-traded funds (ETFs). The amount of Ethereum held on exchanges has been on a steady downward trajectory since mid-2020, with the supply on exchanges halved over the past two years. The most notable shift occurred in mid-July, when the ETH exodus accelerated, falling by 20% as institutional investors and treasury firms aggressively accumulated the digital asset.

The latest figures from Glassnode reveal that Ethereum’s exchange balance has dropped to 14.8 million ETH as of Thursday. Similarly, CryptoQuant's Ethereum exchange supply ratio, which tracks the exchange reserves relative to total supply, has also reached its lowest point since July 2016, sitting at 0.14. Typically, when supply on exchanges declines, it suggests that the asset is being moved into cold storage, staking, or decentralized finance (DeFi) protocols, where it can earn higher yields. Conversely, a rise in exchange balances is often a signal that investors are preparing to sell.

CryptoQuant’s data further highlights an acceleration in Ethereum outflows, as the 30-day moving average of net flows reached its highest level since late 2022. Large withdrawals often indicate a shift toward self-custody or DeFi platforms, which reduces liquidity on exchanges and lessens the likelihood of immediate selling. According to Glassnode, exchange net position changes revealed a negative 2.18 million ETH on Wednesday, a number that has only exceeded five times in the past decade. This trend of large-scale withdrawals has intensified as corporate Ethereum treasuries, such as BitMine, began aggressively accumulating Ethereum in June.

Between April and now, 68 institutional entities have acquired a total of 5.26 million ETH, valued at approximately $21.7 billion, which represents 4.3% of the total supply. Most of these entities are staking their ETH for additional yields, rather than keeping it on exchanges. In parallel, U.S. spot Ethereum ETFs have seen a rise in inflows, amounting to 6.75 million ETH, worth nearly $28 billion, or 5.6% of the total supply. Together, these movements indicate that around 10% of all Ethereum in circulation is being absorbed by institutional investors, with the accumulation accelerating in recent months.

Despite the growing institutional interest and reduced exchange liquidity, Ethereum prices have faced a setback. Over the past week, the price of ETH has fallen by more than 11%, dropping below $4,100 on Thursday morning. While the accumulation trend continues, market volatility remains a factor, leaving analysts like BTC Markets’ Rachael Lucas to suggest that Ethereum is undergoing its own “Wall Street glow-up,” with institutional treasuries continuing to stack ETH, despite short-term price fluctuations.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.