3 reasons why ETH is fleeing from stock exchanges
Over the past week, market analysts have noticed some interesting developments regarding the ETH offering as the London hard fork looms on August 4th.
The latest data from the on-chain analysis company CryptoQuant shows that the ETH reserves on the stock exchanges have hit a new daily low since the beginning of July.
Ether is reserved on all exchanges | Source: CryptoQuant
To determine whether this is an uptrend or a downtrend, we need to take a closer look at several factors that have played a role in the increased demand for Ether, including Eth2.0 staking contracts, increased activity in the DeFi sector, and potential excitement among dealers ahead of the introduction of EIP-1559.
More than 6 million ethers are sAdopt Eth 2.0
A big reason for the increased demand for Ether is that the number of Ethers on the Eth2.0 staking contract has increased exceed the mark 6 million on June 30th.
Data from CryptoQuant shows that July 1st saw the largest daily outflow of 596,000 ethers since January 21st.
Ether net flow across all exchanges | Source: CryptoQuant
The latest data provided by Eth2 Launchpad shows the number of ethers currently in use is 6,166,661, suggesting that not all ethers withdrawn from the exchanges will be staked.
DeFi value increases
Another potential target for ETH to leave the exchange is the DeFi ecosystem, where the token value as well as the Total Value Locked (TVL) in DeFi logs have increased.
Total value locked in DeFi | Source: Defi Lama
While Ether and Bitcoin hold most of their current DeFi-locked value, their prices have remained relatively bleak for the past week, meaning the TVL’s recent surge on July 8th could be due to token appreciation as the deposits according to stable data, Dune Analytics will remain stable.
The excitement of traders rises in front of the London Hard Fork
An equally important post that recently featured in Ether is the upcoming London hard fork with the proposed EIP-1559.
Some analysts expect the upgrade to have a positive impact on the price of ether, as the move to a more environmentally friendly POS mechanism, as well as the new “scarcity” feature, will reduce the amount of ether in circulation.
The excitement over the upcoming hard fork is one of the many reasons that have led to the rise of the ETH / BTC pair since June 27, when the ETH / USDT pair also rallied.
ETH / BTC 4-hour chart | Source: TradingView
While Ether has outperformed Bticoin for most of its time since June 27, the performance of Bticoin during the market-wide pullback on July 8 is an indication that it is still a cryptocurrency.
From a long-term perspective, however, Ether’s value proposition cannot be ignored and the battle between Ether and Bticoin is far from over, as a Goldman Sachs report suggests that Ether is likely to outperform Bitcoin’s total market cap in the years to come.
According to Cointelegraph