Ethereum Investors Take Control: Self-Custody Surges Amid Security Concerns
As the Shanghai upgrade progresses, Ethereum (ETH), the second-largest cryptocurrency by market capitalization, is experiencing a reduction in supply.
The total supply of ETH has decreased by over 66,000 since the beginning of 2023, making it deflationary.
According to Santiment, an on-chain analytics provider, only 10.31% of existing ETH is currently on exchanges, the lowest level since July 2015.
😮📊 #Ethereum is now being held in self custody and away from exchanges at the highest level since the week the token was introduced nearly 8 years ago. This essential all-time low ratio of $ETH on exchanges (10.31%) indicates confidence from #hodlers. https://t.co/VPwlCjzbAN pic.twitter.com/VB2r57xhQl
— Santiment (@santimentfeed) March 27, 2023
Regulators’ inability to classify ETH as a security or commodity has resulted in nearly 90% of Ethereum being held off exchanges.
The rise in self-custody of Ethereum is due to investors’ growing trend to hold their tokens in personal wallets, citing concerns about exchange security and the need for complete control over their assets.
This trend is also being driven by the rise of decentralized finance (DeFi) protocols built on the Ethereum blockchain, which has resulted in a surge in demand for Ethereum.
READ MORE: Bitcoin to Skyrocket in Value as Confidence in Financial System Declines – Cathie Wood
Many investors now view Ethereum as a long-term investment vehicle, much like Bitcoin.
As a result, hodlers are holding onto their Ether for the long term, resulting in a shrinking supply on exchanges and an increase in the cryptocurrency’s price.
Currently, ETH is trading at $1,742, down 4% in the last 24 hours, with a total market cap of $213 billion.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
