CoinNiel
Ethereum Exchange Balances Return to 2016 Levels
Recently, a large amount of Bitcoin has been deposited into exchanges, bringing the total exchange-held supply back to levels seen around 2019. Of course, it should be noted that a significant portion of this Bitcoin is owned by investors who are simply holding their assets on exchanges. In contrast, Ethereum—despite being launched in 2015—currently has an exchange-held supply comparable to levels from mid-2016. The red box represents the current amount of Ethereum held on exchanges, while the blue box indicates the same spot supply level observed in mid-2016. Considering that most of this Ethereum is also investor-owned, it remains an open question whether such low exchange balances can be sustained over time. This is something that warrants close and ongoing monitoring. Although Ethereum’s OTC balance has increased recently, it remains relatively small when compared to the amount held on exchanges. If Ethereum balances on exchanges were to suddenly dry up, followed by the depletion of OTC supply as well, it raises a compelling question: what kind of market dynamics would emerge in such a scenario?