The latest data shows that Bitcoin (BTC) supply and Ethereum (ETH) on stock exchanges dropped significantly. Means largest crypto tokens market capitalization may be well positioned for significant upward moves in the face of imminent supply tightening.
The supply of Bitcoin and Ethereum has fallen to recent lows
BTC ECHO analyst Leon Waidmann shared Glassnode data that showed this exchange balances for Bitcoin and Ethereum are the lowest in years. The supply of Bitcoin on exchanges dropped to 11.6%, while the supply of Ethereum dropped to 10.6%. This suggests that crypto whales they collected these crypto tokens and handed them over to self-custody.
Waidmann stressed the importance of this development, noting that a reduction in supply is inevitable. This supply squeeze could support drive up the prices of Bitcoin and Ethereum from then on most investors they seem to be accumulating rather than discharging their resources at the moment. As such, the analyst urged his followers to “get ready for the next big move.”
Interestingly, cryptocurrency analyst Ali Martinez suggested that this move may have started after Ethereum Spot ETFs Approval. Stated on X (formerly Twitter) post that almost 777,000 ETH ($3 billion) has been withdrawn from cryptocurrency exchanges since the changes were introduced Securities and Exchange Commission (SEC) approved these funds.
When these Spot Ethereum ETFs finally come to market, they are expected to kick the bull ran into full gear. Therefore, it is not surprising that these cryptocurrency whales want to get ahead of this development. Bloomberg analyst Eric Balchunas predicted that these funds would likely begin trading in July.
But research firm Kaiko does warned that these funds may not immediately cause the price of Ethereum to rise to recent all-time highs (ATH). The second-largest crypto token is likely to face significant selling pressure due to potential outflows from Grayscale’s Spot Ethereum ETF. This is based on outflows of $6.5 billion during the period Grayscale’s Bitcoin spot ETF recorded in the first month of trading, which led to a significant drop in the price of Bitcoin.
ETH could reach a recent all-time high in record time
Crypto analyst Michael Nadeau suggested that Ethereum could still reach a recent ATH when Spot Ethereum ETFs start trading faster than Bitcoin after launch Spot Bitcoin ETF. He noted that Ethereum does not offer the same amount of “structured selling” that Bitcoin encounters because ETH validators do not have to sell their holdings to rebalance Operation costsunlike Bitcoin miners.
He also highlighted that 38% of Ethereum’s supply is locked on-chain and stated that “ETH is more agile than BTC.” He further explained that this reflexivity is evident in the way Ethereum leads in on-chain activity, which leads to more ETH burned. That being said, Grayscale’s outflows may not impact Ethereum’s price like it did with Bitcoin’s price, which could see the second-largest crypto token hit recent ATH in the blink of an eye.
