When the amount of crypto on exchanges drop it is a bullish sign for the currency. This is because people are buying and the demand is increasing. This has happened for Ethereum even though the price has dropped nearly 50% from its all-time high. Currently, the amount of Ethereum on exchanges is at a 2-year low right now at 21 million. At this same time, last year the amount of Ethereum on exchanges was more on 26 million. So, that is a significant drop which also justifies the price increase of ETH in last one year.
The boost in Ethereum investment
Bitcoin might be the king of cryptocurrencies but Eth is not far behind. While the former has one major issue (energy usage) that it often gets called out for, Ethereum has solved the same with its 2.0 version. The currency has been slowly moving from the proof of work to proof of stake consensus. This has also resulted in the increase in the staking that happens in the network which locks out a significant amount of ETH.
People are also moving their crypto out of exchanges as they slowly realize the importance of having your own keys. This is also one of the reason why the amount of crypto on exchanges are dropping. So, basically the increased amount of staking and awareness have resulted in this drop of 5 million coins.
Why Eth could take over BTC?
Ethereum is much more scalable and can support a lot more transactions per second as compared to Bitcoin. This is why it has the ability to take over BTC. After the arrival of ETH 2.0 it will also have the advantage of energy usage over Bitcoin as it won’t need huge amount of energy to run. At the same time, the staking opportunities will increase which will boost the amount locked.
Ethereum is also getting the reputation of being a replacement of fiat while BTC looks to compete with gold. And being unlimited in nature even though very small amount is released annually in circulation it becomes more practical to use.
What are your thoughts on the drop in the number of Ethereum on exchnages? And do you think this is a pointing that we might enter the bull run again? Let us know in the comments below. Also, if you found our content informative do like and share it with your friends.