Recent data has revealed a significant drop in the supply of Bitcoin (BTC) and Ethereum (ETH) on exchanges. According to BTC ECHO analyst Leon Waidmann, exchange balances for both Bitcoin and Ethereum are currently at their lowest levels in years. The supply of Bitcoin on exchanges has decreased to 11.6%, while the supply of Ethereum has dropped to 10.6%. This trend indicates that large investors, known as crypto whales, are accumulating these tokens and moving them into self-custody.
Analyst Leon Waidmann emphasized the importance of this development, suggesting that a supply squeeze is on the horizon. With investors seemingly accumulating rather than selling off their holdings, the prices of Bitcoin and Ethereum could be driven up in the near future. Waidmann advised his followers to “get ready for the next big move” in light of this impending supply squeeze.
Crypto analyst Ali Martinez proposed that the recent surge in withdrawals from exchanges may be linked to the approval of Spot Ethereum ETFs by the Securities and Exchange Commission (SEC). Martinez revealed that nearly 777,000 ETH (equivalent to $3 billion) have been removed from exchanges following this approval. The anticipated launch of these ETFs is expected to accelerate the bull run for Ethereum, prompting large investors to position themselves accordingly.
Despite the optimism surrounding the Spot Ethereum ETFs, research firm Kaiko has cautioned that Ethereum’s price may not instantly reach new all-time highs upon the launch of these funds. Similar to the experience of Grayscale’s Spot Bitcoin ETF, which saw significant outflows leading to a price decline for Bitcoin, Ethereum could also face selling pressure. Analyst Michael Nadeau, however, remains optimistic about Ethereum’s potential, suggesting that the lack of “structure selling” in Ethereum compared to Bitcoin could lead to a quicker price surge once the Spot Ethereum ETFs commence trading.
Nadeau pointed out that Ethereum’s unique characteristics, such as the absence of mandatory selling by validators to cover operational costs, differentiate it from Bitcoin. Additionally, he highlighted that a significant portion of Ethereum’s supply is locked on-chain, making it more reflexive in nature. This reflexivity is evident in Ethereum’s dominance in on-chain activity, leading to the burning of more ETH tokens.
The decreasing supply of Bitcoin and Ethereum on exchanges, coupled with the approval of Spot Ethereum ETFs, indicates a bullish trend for these cryptocurrencies. While challenges such as potential selling pressures loom, the unique dynamics of Ethereum give hope for a significant price surge in the near future. Investors should brace themselves for what could be the beginning of a major upward movement in the prices of Bitcoin and Ethereum.
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