Ethereum supply plunges 37% on crypto exchanges

Ethereum supply plunges 37% on crypto exchanges — Is this a bullish signal?

February 16, 2023

The Ethereum network underwent a major upgrade in September 2022, moving from a proof-of-work (PoW) to a proof-of-stake (PoS) network in an event called the Merge.

Its network token Ether (ETH), the second-largest cryptocurrency by market capitalization, has seen a constant decline in exchange supply over the past six months post-Merge.

According to on-chain data, the amount of available ETH sitting on exchanges continues to fall. Since the Merge, there is 37% less ETH on exchanges. A constant decline in supply on exchanges is considered a bullish sign, as there is less ETH available to trade.

There was a total of 19.12 million ETH (worth ~$31.3 billion) on exchanges in September 2022 before the Merge. The number has now declined to 13.36 million ETH (worth ~$19.7 billion) in the second week of February 2023.

Ethereum burn rate. Source: Beacon chain

Apart from a constant decline in ETH supply held on exchanges, ETH's overall market supply has also declined since it turned deflationary after the London upgrade. The deflationary model comes from a fee-burning mechanism introduced through Ethereum Improvement Proposal 1559.

A total of 2.9 million ETH has been burned since the London upgrade in August 2021, estimated to be worth $4.5 billion in today's value.

Get the full story by reading the complete article on Cointelegraph.

Don't miss a beat in the world of crypto. Leverage the same AI technology that Cointelegraph's journalists use to surface the latest news with the NewsQuakes™ indicator that's only available on Cointelegraph Markets Pro — click here to learn more.

Regards,

Russell DeCorte
Director
Markets Pro