Bitcoin And Ethereum Supply Drops To Record Lows Unseen Since 2015 And 2017

Samuel Edyme

1 year ago

3 mins read

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Amid the tussle between the bulls and bears in the crypto market over the past week, the circulating supply of both Bitcoin (BTC) and Ethereum (ETH) has reached record lows, triggering speculation about the potential impact on the cryptocurrency market.

Data provided by Santiment reveals a significant decrease in the amount of BTC and ETH held on exchanges, suggesting a shift in investor behavior.

Bitcoin And Ethereum Supply Plummets On Exchanges

According to Santiment’s data, the circulating supply of BTC on exchanges currently stands at a mere 5.7%, marking its lowest level since December 2017 when the cryptocurrency surged to an all-time high of $20,000.

Similarly, the supply of ETH on exchanges has dropped to 10.1%, the lowest since its inception in 2015. This trend indicates that crypto investors are actively buying and withdrawing their coins from exchanges, opting for alternative storage methods.

Santiment tweeted earlier today:

Bitcoin & Ethereum both continue to quietly see more and more of their existing supplies move into self custody. Though not a perfect indicator, declining coins on exchanges generally hint at future bull runs, given enough time playing out.

Notably, one key reason behind the declining supply of BTC and ETH on exchanges, particularly in the case of Ethereum, is the increasing popularity of staking. Ethereum 2.0’s transition to a proof-of-stake (PoS) consensus mechanism has provided ETH holders with the opportunity to stake their coins and participate in securing the network while earning rewards.

Stakers lock up their ETH in specialized wallets, ensuring its active involvement in the network’s operations rather than leaving it idle on exchanges. This shift towards staking is motivated by the desire to earn passive income and contribute to the long-term growth and security of the Ethereum ecosystem.

On the other hand, the Bitcoin decrease on exchanges is not so clear, however, the possible reason can be attributed to investors looking to keep their BTC holdings for a long time. This could be due to the feared upcoming global recession which has made many turn to the idea of saving funds for the supposed “rainy days.”

Implications On The Crypto Market

The dwindling supply of Bitcoin and Ethereum on exchanges could have significant implications for the broader cryptocurrency market mostly positively. Firstly, it suggests a decreasing selling pressure as fewer coins are readily available for trading. This “hints at future bull runs,” according to Santiment.

With a limited supply on exchanges, potential buyers might face greater difficulty acquiring these digital assets, leading to increased demand and potentially driving up the prices of both Bitcoin and Ethereum.

Additionally, the reduced presence of BTC and ETH on exchanges may indicate a growing confidence among long-term holders. Investors are likely becoming more inclined to hold their coins in secure wallets or participate in staking, signaling a belief in the future potential and value appreciation of these cryptocurrencies.

This shift in behavior reflects a maturing market where participants are increasingly focused on the underlying technology and long-term prospects rather than short-term trading.

Bitcoin (BTC)’s price chart on TradingView — Bitcoin (BTC)’s price moving sideways on the 4-hour chart. Source: BTC/USDT on TradingView.com

Regardless, both BTC and ETH haven’t made any significant movement in the past week. BTC’s price has experienced little upward trend up by 0.3%. BTC has surged from a low of $26,819 seen last Saturday to trading as high as above $27,000 on Thursday.

Ethereum (ETH)’s price chart on TradingView — Ethereum (ETH)’s price is moving sideways on the 4-Hour chart. Source: ETH/USDT on TradingView.com

In contrast, ETH’s price has experienced a slight upward trend up by 0.6% in the past week. ETH has surged from a low of $1,795 last Saturday to trading above $1,800, at the time of writing.

-Featured image from Shutterstock, Chart from TradingView

Samuel Edyme

Meet Samuel Edyme, Nickname - HIM-buktu. A web3 content writer, journalist, and aspiring trader, Edyme is as versatile as they come. With a knack for words and a nose for trends, he has penned pieces for numerous industry player, including AMBCrypto, Blockchain.News, and Blockchain Reporter, among others.

Edyme’s foray into the crypto universe is nothing short of cinematic. His journey began not with a triumphant investment, but with a scam. Yes, a Ponzi scheme that used crypto as payment roped him in. Rather than retreating, he emerged wiser and more determined, channeling his experience into over three years of insightful market analysis.

Before becoming the voice of reason in the crypto space, Edyme was the quintessential crypto degen. He aped into anything that promised a quick buck, anything ape-able, learning the ropes the hard way. These hands-on experience through major market events—like the Terra Luna crash, the wave of bankruptcies in crypto firms, the notorious FTX collapse, and even CZ’s arrest—has honed his keen sense of market dynamics.

When he isn’t crafting engaging crypto content, you’ll find Edyme backtesting charts, studying both forex and synthetic indices. His dedication to mastering the art of trading is as relentless as his pursuit of the next big story. Away from his screens, he can be found in the gym, airpods in, working out and listening to his favorite artist, NF. Or maybe he’s catching some Z’s or scrolling through Elon Musk’s very own X platform—(oops, another screen activity, my bad…)

Well, being an introvert, Edyme thrives in the digital realm, preferring online interaction over offline encounters—(don’t judge, that’s just how he is built). His determination is quite unwavering to be honest, and he embodies the philosophy of continuous improvement, or “kaizen,” striving to be 1% better every day. His mantras, “God knows best” and “Everything is still on track,” reflect his resilient outlook and how he lives his life.

In a nutshell, Samuel Edyme was born efficient, driven by ambition, and perhaps a touch fierce. He’s neither artistic nor unrealistic, and certainly not chauvinistic. Think of him as Bruce Willis in a train wreck—unflappable. Edyme is like trading in your car for a jet—bold. He’s the guy who’d ask his boss for a pay cut just to prove a point—(uhhh…). He is like watching your kid take his first steps. Imagine Bill Gates struggling with rent—okay, maybe that’s a stretch, but you get the idea, yeah. Unbelievable? Yes. Inconceivable? Perhaps.

Edyme sees himself as a fairly reasonable guy, albeit a bit stubborn. Normal to you is not to him. He is not the one to take the easy road, and why would he? That’s just not the way he roll. He has these favorite lyrics from NF’s “Clouds” that resonate deeply with him: “What you think's probably unfeasible, I've done already a hundredfold.”

PS—Edyme is HIM. HIM-buktu. Him-mulation. Him-Kardashian. Himon and Pumba. He even had his DNA tested, and guess what? He’s 100% Him-alayan. Screw it, he ate the opp.

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