News
Bitcoin and Ethereum balance at 4-year lows
Bitcoin and Ethereum user balances have dropped to levels not seen since 2020.
Glassnode data revealed that Bitcoin users’ balances (Bitcoin) and ether (ET) on centralized exchanges hit a four-year low as investors held out for higher prices in a bull market.
BTC balances fell below 2.3 million coins, worth around $160 billion, while ETH balances fell below 16 million, worth less than $59 billion.
Bitcoin and Ethereum trading balance at 4-year low | Source: Glassnode
Why Bitcoin and Ethereum trading levels have declined
According to Glassnode, the amount of BTC and ETH on exchanges has been trending downwards since before July 2020. The data confirmed that users continued to withdraw assets from these platforms after the pandemic, during the previous peak in 2021, during the contagion Terra-FTX of 2022 and also after the approval of BTC spot ETFs.
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 place capital in technologically sound vehicles. Bitcoin’s rigid supply and immutable design have bolstered its status as a hedge against inflation and a favorite with sovereign nations El Salvador they have adopted cryptocurrency as legal tender.
The bullish thesis has perhaps further consolidated as the Wall Street giants like Black rock and Fidelity drove institutional demand via spot BTC ETFs. Companies like it MicroStrategy under BTC maxi Michael Saylor they also parked billions in the main digital asset.
As the second largest cryptocurrency and leading altcoin asset, ETH supports its bullish thesis as the primary replacement for BTC. The token powers the largest decentralized finance (defi) ecosystem worth nearly $70 billion for DefiLlama.
In 2020, developers launched the Beacon Chain, which kicked off the ultimate transition from proof-of-work (PoW) to proof-of-stake (PoS). The move unlocked Ether episodean ETH locking process for network security and passive yield.
At the time of this writing, over 27% of Ethereum’s supply was staked. In other words, users have deposited over $119 billion worth of ETH into staking providers like CoinbaseLido, e Autostratus.
The hype around ETH spot ETF approvals, def growth, and staking surges has culminated in a positive outlook for the cryptocurrency and further encouraged users to hold on for dear life, otherwise known in the crypto community as “hodl” .