Key Points
- Over the past week, more than $900 million of Ethereum [ETH] was withdrawn from centralized exchanges.
- The total number of ETH staked into Ethereum’s deposit contract increased to 40.39 million as of March 1st.
More than $900 million worth of Ethereum (ETH) was removed from centralized exchanges during the past week.
This information comes from on-chain analytics firm IntoTheBlock. It marks the eighth week in a row of net outflows, leading to a significant decrease in the available supply of the cryptocurrency.
Accumulation Trend and Shrinking Liquid Supply
Usually, an increase in exchange outflows suggests a short-term accumulation trend. This is often driven by expectations of higher future returns.
As the liquid supply decreases, investors may have to pay more to buy coins, making such events bullish.
The recent accumulation trend is noteworthy because the total supply of ETH in profit has risen sharply over the past month, reaching 94.87% at the time of writing.
This indicates that investors are holding onto their coins in the hope of increasing their long-term gains.
Staking Trends
However, there is a marked decrease in the number of addresses holding at least 1k coins. This suggests that not all coins withdrawn from exchanges are being held in cold wallets.
So where are these coins going? The total number of ETH staked in Ethereum’s deposit contract has increased to 40.39 million as of March 1st. This is in stark contrast to an exchange balance of just 13.18 million.
The large difference between these two figures suggests that ETH holders are staking and restaking their coins.
The main takeaway from these trends is that investors are prioritizing stable, guaranteed returns over risky market trading.
Another significant reason to stake and become an Ethereum validator is the potential for high fees. Over the past week, validators collected $108.3 million in gas fees, a 43% increase from the previous week.
It’s important to note that while block proposal rewards accrue on the validator, transaction fees within that block are available to the validator immediately.
At the time of writing, the second-largest cryptocurrency was trading at $3,442, having grown 16% in the past week.
