The Ethereum (ETH) held by exchanges has dropped to its lowest level in five years, reaching 17,945,575.311 ETH. Additionally, the number of Ethereum wallet addresses containing 100 or more coins has hit a six-month low of 46,858, according to the data.
According to researchers, the Ethereum (ETH) balance held on cryptocurrency exchanges has reached a new low point not seen in the past five years, with the total currently standing at 17,945,575.311 ETH. While the exact cause for this decrease remains uncertain, several potential factors could contribute to this trend.
In April, the primary blockchain network for smart contracts successfully transitioned to the proof-of-stake (PoS) consensus algorithm. This transformation, known as the Shanghai upgrade, facilitated the withdrawal of staked ETH from the beacon chain.
Regarding Ethereum, recent updates reveal that the count of Ethereum wallet addresses with a balance exceeding 100 ETH has reached its lowest point in six months, standing at 46,858, as reported by Glassnode.
The observed metric may be influenced by heightened staking engagement among large-scale investors, known as whales, and their involvement in decentralized finance (DeFi) ventures like liquidity provision. Another potential factor impacting this metric is the rising popularity of meme coins, including PEPE and similar tokens, attracting substantial capital and posing a significant challenge to Ethereum.
Ethereum Balances Decrease On Centralized Exchanges
As most exchanges, including Binance led by Changpeng Zhao, took part in the staking activity, it is normal for their ETH balances to decrease once network withdrawals are enabled.
A potential reason for the declining ETH balances on exchanges might be the increasing trend among investors to opt for self-custody as a precautionary measure against potential risks associated with crypto exchange incidents, such as the sudden collapse of FTX, led by the disgraced Sam Bankman-Fried, that occurred last year.
At the time of writing, the price of ETH stands at $1,826.11, with a 24-hour trading volume of $5,924,682,383. Over the last 24 hours, Ethereum has experienced a 1.34% increase in value. According to Coin Market Cap, the market capitalization of Ethereum is $219,643,413,660, solidifying its position as the world’s second-largest cryptocurrency.
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