We see a similar pattern with Bitcoin, where the amount of BTC tokens on exchanges has declined to numbers not seen since March 2018, just above 2.23 million BTC.
Why do investors get their crypto from exchanges?
Analyzing the data, it becomes clear that the significant decline mainly took place in November and December 2022, following the collapse of crypto exchange FTX. Data from Glassnode, which illustrates each exchange’s individual balance, confirms that a significant portion of this decline came from FTX.
This was followed by significant outflows to other prominent exchanges such as Binance, Kraken and Coinbase, likely in response to contagion fears seeping through the market. This was also reflected in a notable increase in sales of hardware wallets from vendors such as Ledger and Trezor.
The most recent decline in Ethereum balances on exchanges in May coincided with an increase in the strike. The number of ETH stakes has risen from 19.3 million before the Shapella upgrade to 21.2 million, a vertical jump since early May, according to Nansen’s data.
It is interesting to note that Bitcoin’s balance on the exchanges did not fall in line with ETH’s over the same period. This further suggests that the strike played a significant role in the decline in stock market balances.