bitcoin and ethereum user balances have fallen to levels not seen since 2020.
Data from Glassnode revealed that bitcoin (btc) and Ether (eth) user balances on centralized exchanges hit a four-year low as investors waited for higher prices in a bull market.
btc balances fell below 2.3 million coins, valued at around $160 billion, while eth balances fell below 16 million, equivalent to less than $59 billion. Dollars.
<img loading="lazy" decoding="async" width="1024" height="576" src="https://crypto.news/app/uploads/2024/06/bitcoin-and-ethereum-exchange-balance-at-4-year-low-1024×576.jpg” alt=”bitcoin and ethereum Balance of Exchange at 4-Year Low”/>
Why bitcoin and ethereum Exchange Levels Fell
The amount of btc and eth on exchanges has been on a downward trend since before July 2020, according to Glassnode. The data confirmed that users continued to withdraw assets from these platforms after the pandemic, during the previous peak in 2021, during the Terra-FTX contagion of 2022, and even after btc spot ETFs were approved.
The four-year pattern suggests that cryptocurrency users have adopted a long-term bullish outlook, expressing confidence in the future appreciation of these assets regardless of market cycles.
After the COVID-19 crisis in 2020, inflation also shook global economies and incentivized investors to park capital in technologically sound vehicles. bitcoin's limited supply and immutable design reinforced its status as a hedge against inflation and sovereign nations such as El Salvador have adopted the cryptocurrency as legal tender.
The bullish thesis will perhaps consolidate further as Wall Street giants like BlackRock and Fidelity drive institutional demand through btc spot ETFs. Companies like MicroStrategy under btc maxi Michael Saylor have also poured billions into the leading digital asset.
As the second-largest cryptocurrency and leading altcoin asset, eth has its own bullish thesis as the leading substitute for btc. The token powers the largest decentralized finance (defi) ecosystem with a value of almost $70 billion by DefiLlama.
In 2020, developers launched the Beacon chain, which began the eventual transition from proof-of-work (PoW) to proof-of-stake (PoS). The move unlocked Ether staking, a process of locking eth for network security and passive performance.
At the time of this publication, over 27% of the ethereum supply was staked. In other words, users have deposited over $119 billion worth of eth into staking providers like Coinbase, Lido, and EigenLayer.
The hype around eth ETF spot approvals, Defi growth, and staking surges has culminated in a positive outlook for the cryptocurrency and further encouraged users to hold on for dear life, aka the crypto community as “hodl”.
