Last September, the Ethereum (ETH) network made the long-awaited transition Proof of Work (PoW) to Proof of Stake (PoS). Since this update, dubbed “the Merge,” Ethereum went deflationary for the first time. Recently you could read in the Ethereum news that the supply of ETH is a all time low had deposited about 120 million ether.
According to un-chain data from crypto analytics company Santiment, the amount of ETH available on crypto exchanges has also continued to decline since the Merge.
📉 #Ethereum has dropped -13% since peaking at $1,688 back on February 7th. However, the good news is that the amount of available $ETH sitting on exchanges (and available to sell) continues to fall. Since the #mergethere are 37% less coins on exchanges. https://t.co/HOnHO6iLpJ pic.twitter.com/YpReloS8iT
— Santiment (@santimentfeed) February 13, 2023
Less ETH on exchanges
Since September, there is currently 37% less ether available on crypto exchanges. Just prior to the Merge, there was a total of 19.12 million ETH, worth $31.3 billion, on exchanges. The number has now dropped to 13.36 billion ETH, which is worth $19.7 billion at the current ethereum price.
A constant drop in supply on exchanges becomes like a bullish sign as there is less ETH available to trade or sell.
There has clearly been a significant drop in the ethereum supply on exchanges since the FTX crypto exchange fell. At the time, many investors chose to be on the safe side and decided to remove their crypto from central exchanges as quickly as possible.
Ethereum shanghai update
A large part of the ethereum supply is therefore moved to self custody, but many investors also prefer to stake ethereum with the Shanghai upgrade just around the corner. Last week you could read that the first ETH withdrawals on the testnet ‘Zhejiang’ were successful. The Shanghai update, scheduled for March this year, will integrate more enhancement proposals and network enhancements and will allow staked ether to be withdrawn from staking contracts. This is currently not possible yet.
Currently, 16 million ETH, or 14% of the total supply, has been wagered on the Beacon Chain. This amounts to about $25 billion at the current ethereum price. According to JPMorgan, more people will go on strike after the launch of the Shanghai update.