Supplies of bitcoin and ethereum on centralized exchanges have hit record lows following the introduction of cryptocurrency-related spot exchange-traded funds (ETFs) in the United States.
According to data from Glassnode, bitcoin balances on exchanges have fallen to 11.6%, the lowest since December 2017. ethereum balances are even lower, at 10.6%, the lowest since October 2017. 2015.
Spot ETFs trigger withdrawals
Market experts have explained that the decline in exchange balances coincides with the Securities and Exchange Commission's (SEC) approval of ETF products for bitcoin and 19-b filings for ethereum.
Hello Apollo bitcoin-tracker/overview”>data reveals that bitcoin spot ETFs have accumulated 857,700 btc, valued at $58.5 billion, in just five months. BlackRock's IBIT ETF leads this acquisition with about $20 billion in assets, followed by Fidelity's FBTC with about $11 billion.
While ethereum spot ETFs have not yet begun trading, investor anticipation has led to significant withdrawals. According to CryptoQuant eth/chart/exchange-flows/exchange-reserve?exchange=all_exchange&window=DAY&sma=0&ema=0&priceScale=log&metricScale=linear&chartStyle=line”>data777,000 eth, worth about $3 billion, have been withdrawn from exchanges since the SEC approval.
Furthermore, the option to stake eth has influenced the decrease in its exchange balance. Nansen reports that 32.8 million eth, or 27% of its total supply, is currently staked to support the network.
Is a supply crisis looming?
If the downward trend in the exchange balance continues, market experts have predicted that the demand for bitcoin and ethereum could cause a supply crisis.
In a recent social media post, btc Echo editor Leon Waidmaan x.com/LeonWaidmann/status/1797271463952892124″>advised Investors should prepare for a “supply squeeze” and the possibility of “the next big move.”
Historically, when digital assets are delisted from exchanges, it suggests that investors plan to hold them rather than sell them, reflecting bullish sentiment and expectations for future growth. A supply squeeze could significantly impact prices by limiting available supply, which could lead to substantial price increases if current stockpiling trends persist.
