Ethereum exchange reserves drop to two-year lows: report
Ethereum exchange reserves fell to their lowest level in two years and, according to CryptoQuant, the number fell from 26 million in June 2020 to less than 21 million in July 2021 as we read more about our latest Ethereum news.
The decline seems to go hand in hand with the rise in ETH price, and in the past few months the ETH price has risen and Ethereum’s foreign exchange reserves have fallen to new lows. An exchange reserve is the supply available for sale, margin trading, and altcoin purchases on exchanges, and these days the amount available on exchanges is getting smaller and smaller. With the announcement of ETH 2.0, a new opportunity has been created for investors to set their coins and benefit from them. Ethereum’s move from proof-of-work to proof-of-stake means the network doesn’t need validators. A validator is a means of validating transactions in a PoS network. This means that everyone can run their own node.
It only takes up to 32 ETH to run your own node and become a validator. Hence, many investors take the staking option for themselves and this method is more secure as you have access to the private key while you are still placing your place bets. As long as you know what to do. This means that users can now take their coins off the exchange and put them in their own personal wallets, as long as they have enough funds, they can set up their own nodes and wager their money on their own terms.
This leads to investors leaving their money on the exchange with a smaller amount. In total, the exchanges lost more than 5 million coins from their reserves in one year. And that number is expected to hold up as more investors join the bet. An incredible 6 million ETH have been deployed at ETH 2.0 and the number of validators on the network has exceeded 179,000 and continues to grow. However, if something happens on the exchange, you can somehow leave your coins to the attackers and therefore the long-term owners do not leave their money in the exchange. Coins are only left for trading or use on exchanges, so investors who move their ETH to wallets they control could make up part of the reduced exchange reserves.
As more and more people understand how the market works, they know the best way to save your money, in a wallet where you have full control over the keys. For example, Ledger will give you seed phrases when you get your wallet and users can write down their seeds and you may be the only one with access to them.
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