21. September 2023

Ethereum Exchange Balance Drops to 5-Year Low: What’s Next?

• Ethereum exchange balance drops to a five-year low on May 26, with 14.85% of the total Ether supply held on centralized exchanges.
• The decline began in September 2022 and was accelerated by the FTX crisis in November.
• The Shapella upgrade allowed thousands of validators to withdraw their staked ETH, though most only withdrew their staking rewards.

Ethereum Exchange Balance Drops

On May 26th, the balance of available Ether (ETH) across crypto exchanges dropped to a five-year low, bringing the total amount of Ether held on exchanges to 17.86 million. According to Glassnode data, this makes up only 14.85% of the total Ether supply which is significantly lower than during the 2021 bull run when 25-26% was held on centralized exchanges.

Decline Began in September 2022

The drop in ETH supply began in September 2022 and was accelerated by the FTX crisis in November where many moved their crypto assets from exchange wallets to self-custody wallets for safety. Additionally, Ethereum wallet addresses holding more than 100 ETH have also declined to a six-month low as well.

Shapella Upgrade

The Shapella upgrade made way for thousands of validators to withdraw their staked ETH but contrary to popular belief, only a minority decided to unstake while most just withdrew their staking rewards instead.

Impact on Crypto Market

The drastic decline in exchange balance could be seen as bearish for Ethereum and other cryptocurrencies as it indicates that traders are not feeling confident enough about the market conditions right now and are taking out their coins from exchanges instead of investing them into new projects or trading them actively themselves. This could cause prices across different crypto markets to remain stagnant or even continue dropping further if such behavior persists over time without any signs of recovery soon enough.


In conclusion, while it’s difficult to predict how long this downward trend will last and what its ultimate effect will be on cryptocurrency prices, it’s clear that Ethereum has experienced its largest drop in exchange balance since April 2018 due largely due to both the FTX crisis and Shapella upgrade allowing many validators a chance to withdraw their staked ETH. Investors should take note of these developments before making any decisions regarding buying/selling cryptoassets moving forward as there might still be potential risks involved with this volatile market environment at present times despite all efforts taken towards providing better security measures through self-custody wallets recently adopted by some traders