Bitcoin
Bitcoin and Ethereum exchange balances at least 4 years
Bitcoin and Ethereum user balances have fallen to levels not seen since 2020.
Glassnode data revealed that Bitcoin users’ balances (Bitcoin) and Ether (ETH) on centralized exchanges hit its lowest level in four years as investors resisted higher prices in a bull market.
BTC balances fell to less than 2.3 million coins, valued at around $160 billion, while ETH balances fell to less than 16 million, totaling less than $59 billion.
Bitcoin and Ethereum exchange balance at least 4 years | Source: Glassnode
Why Bitcoin and Ethereum Exchange Levels Dropped
The amount of BTC and ETH on exchanges has been on a downward trend since before July 2020, according to Glassnode. The data confirmed that users continued to withdraw assets from these platforms after the pandemic, during the previous 2021 spike, during the 2022 Terra-FTX contagion, and even after the approval of spot BTC ETFs.
The four-year pattern suggests that cryptocurrency users have adopted an optimistic long-term outlook, expressing confidence in the future appreciation of these assets regardless of market cycles.
Following the COVID-19 crisis in 2020, inflation also shook global economies and encouraged investors to allocate capital to technologically sound vehicles. Bitcoin’s limited supply and immutable design have reinforced its status as a hedge against inflation and sovereign nations like El Salvador adopted cryptocurrency as legal tender.
The bullish thesis may solidify further as Wall Street giants like Black stone and Fidelity boosted institutional demand through spot Bitcoin ETF. Companies like Microstrategy under BTC maxi Michael Saylor also parked billions in the leading digital asset.
As the second-largest crypto asset and leading altcoin, ETH commands its own bullish thesis as the top replacement for BTC. The token powers the largest decentralized finance (defi) ecosystem, worth nearly $70 billion per DefiLlama.
In 2020, developers launched the Beacon chain, which began the eventual transition from proof of work (PoW) to proof of stake (PoS). The move unlocked Ether to betan ETH locking process for network security and passive income.
At press time, over 27% of the Ethereum supply was staked. In other words, users have deposited over $119 billion worth of ETH to staking providers like Coin baseRead and EigenLayer.
The excitement surrounding spot ETH ETF approvals, definition growth, and staking increases has culminated in a positive outlook for the cryptocurrency and further encouraged users to hold on for dear life, also known in the crypto community as “hodl.”