There are three main reasons why the number of Ethereum coins is declining in trading platforms
The balance of Ethereum in cryptocurrency trading platforms reached its lowest level in the last 15 months, as the number of Ethereum in the trading platforms was estimated at 15.4 million Ethereum, which is an estimated value ($ 20.5 billion), according to a tweet published by "Glassnode" on Saturday, January 23.
📉 #Ethereum $ETH Balance on Exchanges just reached a 15-month low of 15,423,305.652 ETH
— glassnode alerts (@glassnodealerts) January 23, 2021
View metric:https://t.co/1dCpD2ey8E pic.twitter.com/N8nIQJxbVY
The exodus of Ethereum from the trading platforms began last Tuesday, at which time the number of Ethereum in the trading platforms was estimated at 16.6 million ETH, which means that $ 1.6 billion worth of Ethereum left the trading platforms.
The account "Whale Alert", on Twitter, reported that large quantities of Ethereum were exiting from cryptocurrency trading platforms towards foreign wallets.
Where did the Ethereum coins go and what caused the mass exodus?
Pedro Vibrero, an analyst at Quantum Economics, said there could be three reasons for the exodus of a lot of Ethereum from trading platforms.
First: The high number of Ethereum locked into decentralized financing protocols:
The number of closed Ethereum coins has increased in the decentralized financing protocols, as “Febrero” indicated an increase in interest in the decentralized financing arena thanks to the decentralized lending and decentralized trading platforms provided by these protocols ...
According to "DeFi Pulse," a site that tracks the amount of cryptocurrencies locked in smart contracts, the amount of locked ETH in the DeFi decentralized financing protocols actually decreased from 7 million ETH on Tuesday to 6.9 million the next day, and then returned again to 7 million Ethereum.
Second: The high number of closed Ethereum in the Ethereum allocation process:
The number of ETH tokens locked up in blockchain (PoS) contracts has grown by more than 320% since December 2020.
Vibrio also spoke about the number of Ethereum coins closed in ETH2.0 smart contracts, as many holders of Ethereum coins allocate them in the Ethereum network to obtain post rewards.
On January 19, 170,000 Ethereum was placed in Ethereum ETH2.0, then another 200,000 Ethereum last Wednesday.
Third: Institutional Demand for Ethereum:
As for the third reason, he told "Febrero" that institutional investors and smart money owners, such as the "Grayscale" investment company, are accumulating Ethereum.
But according to "BYBT", "Grayscale" hasn't bought more Ethereum for its publicly traded funds for a while.
All these previously mentioned factors contributed to the decline in the number of Ethereum from trading platforms and contributed to the rise in the price of Ethereum to new records.