The supply of Ethereum (ETH) has dropped to its lowest level since November 2015, continuing its downward trend on centralized exchanges.

In the past seven weeks, the amount of ETH on exchanges has decreased by 16.4% to 8.97 million ETH. This decline indicates that investors are increasingly directing their tokens towards decentralized finance (DeFi) and staking mechanisms.

CHANGE IN INVESTOR BEHAVIOR POST-MERGER
After the transition to the Proof of Stake (PoS) mechanism post-merger, investors are seen to be actively participating in the Ethereum network rather than centralized exchanges. According to Santiment data, Ethereum holders are progressively moving their assets to staking and DeFi applications.

The exodus of Ethereum from exchanges has increased interest in lending, providing liquidity, and yield farming activities in the DeFi ecosystem, besides the return advantages offered by staking rewards. This signifies investors’ desire to utilize their ETH within the network rather than passively holding them on exchanges.

RAPID DECLINE IN ETHEREUM EXCHANGE SUPPLY
The 16.4% decrease in Ethereum exchange supply over the past seven weeks marks the largest drop since late 2024. This trend indicates a shift from Ethereum being solely a tradable asset to becoming a profitable investment vehicle.

The ongoing withdrawal of ETH from exchanges suggests that investors have long-term price increase expectations, anticipating a continued bullish market trend. Decreasing supply may create scarcity effects and put upward pressure on prices at stable demand levels. Furthermore, reduced exchange liquidity can accelerate price movements by causing increased volatility.

STRENGTHENED POSITION OF ETHEREUM IN THE FUTURE
Ethereum’s increasing activity within the network, away from centralized platforms, is considered a significant development for its long-term sustainability. The growing attraction of DeFi and staking mechanisms is solidifying Ethereum’s position as a valuable financial asset in an expanding ecosystem, transitioning it from being just a cryptocurrency.