The supply of Ethereum (ETH) on centralized exchanges has plunged to its lowest level in nine years, signaling mounting institutional interest and a shift toward long-term holding strategies. According to Glassnode, exchange balances have fallen to 14.8 million ETH, a level not seen since July 2016.
Ethereum’s exchange reserves have been steadily declining since mid-2020, but the trend has accelerated in recent months. Over the past two years, the amount of ETH held on exchanges has been slashed by 50%. Since mid-July alone, balances have dropped another 20%, underscoring the scale of the exodus.
Data from CryptoQuant shows its Ethereum exchange supply ratio at 0.14 — the lowest in nearly a decade. This ratio measures the percentage of ETH reserves held on exchanges compared to the total circulating supply.
When crypto assets leave exchanges, it often means they are being transferred into cold storage, staking platforms, or DeFi protocols, which reduces immediate selling pressure. Conversely, rising exchange balances typically indicate that investors are preparing to sell.
Net Outflows Surge to Multi-Year Highs
Supporting this view, the 30-day moving average of Ethereum’s net exchange flows hit its highest level since late 2022. Glassnode further reported that on Wednesday alone, exchanges saw a net outflow of 2.18 million ETH — one of the largest withdrawals recorded in the past decade.
As one analyst noted, “Large-scale withdrawals often indicate a shift toward self-custody or yield-generating DeFi strategies, tightening exchange liquidity and lowering short-term volatility risks.”
Digital Asset Treasuries Drive Accumulation
One of the biggest drivers of Ethereum’s supply shortage is corporate treasuries. Since April, 68 institutional entities have collectively acquired 5.26 million ETH, worth roughly $21.7 billion. According to StrategicEthReserve, most of this ETH has been allocated to staking, locking the assets away from exchange circulation.
Notably, BitMine, chaired by Tom Lee, now holds over 2% of Ethereum’s total supply, highlighting the rapid pace of corporate adoption.
Spot Ether ETFs Add More Pressure
At the same time, U.S. spot Ether exchange-traded funds (ETFs) have seen steady inflows. Together, they now hold 6.75 million ETH, valued at nearly $28 billion — or about 5.6% of the total circulating supply.
This means that nearly 10% of all Ethereum in existence has been absorbed by institutional buyers, ETFs, and treasuries in just the last several months.
Analysts Call It Ethereum’s “Wall Street Glow-Up”
Rachael Lucas, an analyst at BTC Markets, described the trend as Ethereum’s “Wall Street glow-up.”
“Treasuries are stacking ETH, exchange supply hits a 9-year low, and Tom Lee’s calling $10K to $15K by year-end,” she wrote.
Despite the bullish accumulation data, ETH prices have recently struggled, slipping 11% in the past week to trade just under $4,100. Still, many analysts believe the supply crunch could set the stage for a major rally into year-end if demand persists.
The sharp decline in ETH exchange balances highlights a fundamental shift in Ethereum’s market structure. With institutional treasuries, ETFs, and staking programs locking away large amounts of ETH, exchange liquidity is shrinking rapidly.
This Wall Street-driven accumulation wave could become a key catalyst for Ethereum’s next bull run — even if short-term volatility remains.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.