Ethereum Exchange Supply Hits Lowest Level in Nine Years

Ethereum stored on centralized exchanges has fallen to levels not seen since 2016. This indicates more long-term holding and less short-term selling. This trend has been happening for years but sped up in mid-2025. Experts say it is a lasting change that could affect Ethereum’s liquidity and market activity for months.

ETH Exchange Balances Are Shrinking

Ethereum holdings on exchanges have been declining steadily since mid-2020, reducing the supply by nearly half over the past two years. Glassnode reports that only 14.8 million ETH remain on exchanges, a figure not seen since 2016. The Ethereum exchange supply ratio, tracked by CryptoQuant, now stands at 0.14, marking its lowest level in almost a decade.

When ETH is withdrawn from exchanges, it usually enters cold storage, staking services, or DeFi platforms. This reflects a preference for earning rewards or long-term holding over immediate selling. Reduced availability for trading can limit short-term price swings and centralize the supply among fewer holders.

The withdrawal trend has picked up since mid-July. Exchange balances have fallen nearly 20 percent in just a few months, suggesting that institutional buying is playing a larger role in shaping market dynamics.

What Do The Net Outflows Mean?

Data from CryptoQuant shows that Ethereum’s 30-day moving average for exchange net flows has reached levels not seen since late 2022. CryptoOnchain notes that large withdrawals typically signal a move toward self-custody or DeFi use, which eases immediate selling pressure and alters market liquidity.

Glassnode reports a single-day net outflow of 2.18 million ETH, a figure only exceeded five times in the last ten years. This indicates investors are not merely shifting coins between wallets but reallocating holdings for security and yield.

Overall, Ethereum appears to be moving from an exchange-focused market toward one shaped by long-term holdings. This transition could affect how the asset responds to price changes and broader economic trends in the months ahead.

How Are Institutions Shaping ETH Supply?

ETH outflows have been rising alongside growing activity from corporate treasuries and institutional investors. Organizations such as Tom Lee-led BitMine now control over 2% of the total supply, while around 68 entities have acquired 5.26 million ETH since April, valued at roughly $21.7 billion. Most of these coins are being staked instead of staying on exchanges.

At the same time, US spot Ether ETFs have accumulated significant amounts, holding 6.75 million ETH worth nearly $28 billion, which represents about 5.6% of total supply. Combined, institutional holdings now make up nearly 10% of all ETH, reflecting a market shift in which long-term investors are increasingly influencing supply and liquidity.

Analyst Rachael Lucas called this a “Wall Street glow-up” for Ethereum, noting the contrast between growing institutional interest and recently subdued ETH prices that fell below $4,100. This shows that accumulation and price movements do not always align.

What Does It Mean for Investors?

The drop in Ethereum on exchanges shows how the market is changing. Increasing amounts of ETH are moving to self-custody, staking, and institutional accounts, reducing liquidity. This can make it more difficult for normal investors to respond to price changes or sell large amounts.

This pattern also suggests ongoing confidence in Ethereum’s future. Holding ETH for yield or strategic goals points to continued institutional trust, even amid temporary price changes.