Ethereum Supply Squeeze? 10-Year Low Ignites Price Speculation

The supply of Ethereum on cryptocurrency exchanges has declined to a level not seen since November 2015, a key indicator of the dramatic change in how investors are storing the digital currency.

Based on recent data, around 8.97 million ETH are in their possession now. This shortage comes as the price of Ethereum has taken a precipitous decline.

Supply Tightens On Exchanges

The declining volume of Ether on exchanges is an indication that the holders are taking their money elsewhere in growing numbers. One of the main reasons behind this is the rise of decentralized finance, or DeFi for short, according to a recent examination by Santiment.

People are interacting with several DeFi protocols with their Ethereum to lend liquidity or earn rewards. Another principal element is the expansion of staking, whereby ETH owners “lock up” their coins to help secure the network and be rewarded while doing so. Therefore, there is fewer Ethereum to sell on the exchanges.