ETH Supply On Exchanges Hits 28-Month Low
3 min readThe order book supply of ETH on cryptocurrency exchanges has hit a 28-month low as demand for the market’s second-in-line soars.
Supply Shrinks, Demand Soars
According to data from cryptocurrency analyst Santiment, the ratio of ETH (ETH) supply on exchanges to the cryptocurrency’s total supply is at a 28-month low.
Specifically, the percentage of ETH on exchanges dipped below 20%. This is the lowest it has been since the analyst began recording the data.
Just over a year ago, the percentage hit a record high of 27%. However, supply saw a steady decline as the wider cryptocurrency market began growing in value, prompting a surge in demand for ETH.
At the time of the record high ETH supply, the price of ETH was just over $110. At press time, ETH is trading at $1,788.56. Moreover, it broke the key $2,000 level to reach an all-time high of $2,042.93 just weeks ago.
#ETH's ratio of token supply on exchanges (20.1%) is now sitting at a 28-month low. We generally look for relative drops in exchange supply compared to previous months as an indication of safety from major isolated selloffs for #crypto assets. https://t.co/SowKiMpSac pic.twitter.com/GMxFX7kAg1
— Santiment (@santimentfeed) March 21, 2021
Institutional Hoarding
The trend regarding the availability of ETH on cryptocurrency exchanges may be the result of the increased institutional interest the space is presently seeing.
For example, Grayscale Investments operates an ETH investment vehicle called the Grayscale ETH Trust (GETH). This is attracting investment from larger institutions.
The Trust has just under $5.7 billion worth of ETH under management, representing nearly 2% of the total ETH supply in the market.
Moreover, GETH is the second most popular Trust operated by the investment company. The company flagship, the Grayscale BTC Trust, takes first place. Its popularity regularly leads to Grayscale purchasing millions of dollars worth of the top-cryptocurrency.
A Market-Wide Issue
As the top two cryptocurrencies continue to attract large institutions to the cryptocurrency market, other cryptocurrencies are also capturing part of the attention.
On Mar. 20, BeInCrypto reported that on-chain data suggested Chainlink (LINK) was also seeing a supply shortage on top cryptocurrency exchanges. In fact, that shortage also came after Grayscale announced plans to launch a LINK-based trust.
It might be reasonable, therefore, that the market is expecting LINK to follow the same path as ETH with regard to institutional investment.
Furthermore, the same investigation found that the supply of BTC (BTC) on top exchanges was also in decline. This comes as earlier reports suggested BTC miners were hoarding instead of releasing their reward.
If these supply shortages continue, and demand continues to grow, the market is likely setting up for a big move to the upside.
Brace for new heights.
The post ETH Supply On Exchanges Hits 28-Month Low appeared first on BeInCrypto.
