Ether holdings on centralized exchanges have dropped to their lowest point since 2016, driven by growing institutional accumulation.
Exchange balances have been steadily shrinking since mid-2020, with the available supply of Ether (ETH) cut by around 50% over the past two years.
The ETH exchange exodus accelerated in mid-July, with balances dropping 20% since then as digital asset treasuries ramped up accumulation. As of Thursday, the exchange balance is down to 14.8 million ETH, according to Glassnode.
CryptoQuant reports a similar trend with its Ethereum exchange supply ratio, which measures the exchange reserve divided by the total supply, at 0.14 — its lowest level since July 2016.
When exchange supplies fall, it is usually a sign that the asset is being moved into cold storage, staking or into DeFi for greater yields. When exchange balances increase, it is often a sign that investors are preparing to sell.
Net outflows are increasing
CryptoQuant data also revealed that the 30-day moving average of total Ethereum exchange net flows reached its highest level since late 2022 this week, indicating an acceleration in flows.
“Large-scale withdrawals often indicate a shift toward self-custody or DeFi deployments, reducing exchange liquidity and immediate selling pressure,” commented CryptoQuant author CryptoOnchain.
Meanwhile, Glassnode’s exchange net position change showed a negative 2.18 million ETH on Wednesday. It has only been higher than this five times over the past decade.
Digital asset treasuries accumulate more Ether
Exchange outflows have accelerated since corporate Ether treasuries such as Tom Lee-chaired BitMine, which now holds over 2% of the total supply, started aggressively accumulating the asset in June.
Since April, around 68 entities have scooped up 5.26 million ETH worth around $21.7 billion and representing 4.3% of the entire supply, according to StrategicEthReserve.
The vast majority of them are staking the asset for additional yields and not holding it on exchanges.
Related: ETH price euphoria fades, but $5K remains the end-of-year target: Analyst
Over the same period, US spot Ether exchange-traded funds have also seen increased inflows. These now total 6.75 million ETH worth almost $28 billion, equating to 5.6% of the total supply.
This means that around 10% of all ETH in existence has gone to institutional entities, with accumulation accelerating over the past few months.
Analyst calls it “Wall Street glow-up”
BTC Markets analyst Rachael Lucas said on X that Ethereum was getting “the Wall Street glow-up.”
“Treasuries are stacking ETH, exchange supply hits 9-year low, and Tom Lee’s calling $10K to $15K by year-end.”
Ether prices have fallen back, however, retreating more than 11% over the past week and falling below $4,100 on Thursday morning.
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