Ethereum (ETH), the world’s second-largest cryptocurrency by market cap, has seen a significant exodus from centralized exchanges in recent weeks, with data suggesting a growing preference for holding the asset outside of trading platforms. At the time of writing, ETH was trading at $2,289, down 0.7% in the last 24 hours, but managed to gain 1.6% in the last week, data from Coingecko shows. Related Reading: Avalanche To Unleash 9.5 Million Tokens, Traders Brace For Impact Ethereum Outflow Hits $1.2 Billion According to blockchain analytics firm IntoTheBlock, a staggering $500 million worth of ETH exited exchanges last week, contributing to a total outflow of $1.2 billion for the entire month of January. This represents a major shift compared to previous months, raising questions about the motivations behind this trend. $500M in $ETH was withdrawn from CEXs this week, adding to a total of over $1.2B in outflows in the last month pic.twitter.com/e8NFOGtrDV — IntoTheBlock (@intotheblock) February 2, 2024 CryptoQuant data paints an even starker picture, showcasing a dominant pattern of outflows since the beginning of January. The chart reveals a persistent decline in exchange holdings, with the last inflow recorded on January 30th. At the time of writing, the outflow continues unabated, with over 3,000 ETH leaving exchanges every hour. However, the impact on overall exchange supply is not entirely uniform. While the total amount of ETH held on exchanges initially increased in January, reaching around 10.7 million by mid-month, it subsequently dipped to 10.3 million by January 28th. Currently, the supply has resumed an upward trend, sitting at around 10.6 million. Binance ETH Exodus: Investors’ Strategic Moves Interestingly, the historical balance of ETH on Binance, the world’s largest cryptocurrency exchange, tells a different story. Despite the overall uptick in exchange holdings, Binance has witnessed a consistent decline in its ETH balance throughout January. From a peak of over 3.9 million ETH on January 23rd, the balance has shrunk to around 3.7 million, indicating that users are actively withdrawing their Ethereum from the platform. Ethereum currently trading at $2,288.5 on the daily chart: TradingView.com While the exact reasons behind this trend remain unclear, several possible interpretations emerge: Increased Investor Confidence: Moving ETH off exchanges could signal a growing sentiment among investors to hold the asset for the long term, potentially driven by confidence in its future potential. Additionally, some investors might be transferring their ETH to DeFi platforms for staking or yield farming opportunities. Market Uncertainty: The recent outflows could also reflect broader concerns about market volatility or potential regulatory changes, prompting investors to seek safer storage for their holdings. Binance-Specific Dynamics: The decline on Binance might be due to factors specific to the exchange, such as user preferences for alternative platforms or changes in its trading fees or policies. Related Reading: Dogecoin Orbit Expands: Over 890,000 New Addresses Join DOGE Community Featured image from Adobe Stock, chart from TradingView
