The amount of Ethereum held by centralized exchanges has dropped to its lowest level since 2016, primarily due to increased institutional accumulation.
The supply of Ether (ETH) on exchanges has been declining since mid-2020. Over the past two years, the supply of ETH on exchanges has been halved.
ETH outflows from exchanges accelerated in mid-July and have since decreased by 20% due to active accumulation in digital asset treasuries. According to Glassnode data, as of Thursday, it has fallen to 14.8 million ETH.
CryptoQuant reported a similar trend, with its Ethereum exchange supply ratio (exchange reserves divided by total supply) at 0.14—this is the lowest level since July 2016.
When exchange supply decreases, it typically indicates that assets are being moved to cold storage, staking, or DeFi for higher yields. When exchange balances increase, it often suggests that investors are preparing to sell.
CryptoQuant data also shows that the 30-day moving average of net Ethereum exchange flows reached its highest level since the end of 2022 this week, indicating accelerated flows.
"Large withdrawals typically indicate a shift towards self-custody or DeFi deployment, reducing exchange liquidity and immediate sell pressure," commented CryptoQuant author CryptoOnchain.
Meanwhile, Glassnode's net position change for exchanges showed a negative 2.18 million ETH on Wednesday. In the past decade, only five instances have exceeded this figure.
Since June, when corporate Ethereum treasuries (such as BitMine, chaired by Tom Lee, which now holds over 2% of the total supply) began actively accumulating the asset, exchange outflows have accelerated.
According to StrategicEthReserve data, approximately 68 entities have purchased 5.26 million ETH since April, valued at about $21.7 billion, accounting for 4.3% of the total supply.
The vast majority of these are staking the asset for additional yields rather than holding it on exchanges.
During the same period, there has also been an increase in inflows to U.S. spot Ether exchange-traded funds. These funds now hold a total of 6.75 million ETH, valued at nearly $28 billion, equivalent to 5.6% of the total supply.
This means that about 10% of all existing ETH has flowed to institutional entities, with accumulation accelerating over the past few months.
BTC Markets analyst Rachael Lucas stated on X that Ethereum is gaining a "Wall Street halo effect."
However, the price of Ether has retreated, dropping over 11% in the past week and falling below $4,100 on Thursday morning.
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Original article: “Ethereum (ETH) Exchange Balances Hit 9-Year Low, ‘Wall Street Halo Effect’ Emerges”
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