Bull Market Back? Bitcoin, Ether Supply on Exchanges Fell in June6. July 2023
• The supply of Bitcoin (BTC) and Ether (ETH) on exchanges fell significantly in June as more crypto holders chose to take self-custody.
• Miners took advantage of the strong performance, resulting in nearly doubled monthly BTC inflows from miners to exchanges.
• Transaction fees returned to normal levels after the network congestion witnessed in May and there was a rise in new on-chain activity.
Decline in Crypto Supply On Exchanges
The exchange balances of Bitcoin (BTC) and Ether (ETH) fell significantly in June as more crypto holders chose to take self-custody, a report by investment bank Goldman Sachs has said. Analyzing on-chain data, the Goldman Sachs report said it is likely that many crypto investors have moved their holdings away from exchanges due to fears over regulatory crackdowns and potential security issues related to hacking and theft. Another possible explanation is that staking of ETH has now become possible through self-custodial solutions, which incentivizes the withdrawal of tokens from exchanges. As a result of this move to self-custody, exchange’s supply of the two largest cryptocurrencies by market capitalization, BTC is now close to its lowest level since December 2022. Similarly, the supply of ETH on exchanges is also down, reaching levels not seen since May 2018.
Record Month for Bitcoin Miners’ Inventory Sales
June marked a record month for Bitcoin miners’ inventory sales as miners took advantage of the cryptocurrency’s strong performance, resulting in nearly doubled monthly BTC inflows from miners to exchanges amounting to $99 million. During this period, the price of Bitcoin rose by approximately 12% to a price of $30,472 as of the end of the month.
Transaction Fees Returning To Normal
In addition to miners taking advantage of Bitcoin’s strong performance transaction fees finally returned to normal levels after experiencing network congestion back in May. As a result both Bitcoin and Ether saw a rebound with an increase address activity for both coins rising 15% for bitcoin and 37% for ether respectively with an overall decrease average daily ether burnt which fell 65%.
Rise In New On Chain Activity
The daily average count for new addresses for both Bitcoin and Ether rose 9%for bitcoin 48% Ethernet compared with last month signifying an increase new on chain activity correlated with these two coins rise popularity among investors who are choosing take custody their own holdings rather than rely third party services or vulnerable exchange platforms who may be subject potential security issues or regulatory crackdowns current economic environment .
Bull Market Back?
Based off all these developments it seems that decline Bitcoin and Ether supply on exchanges coupled increased new chain activity may suggest return bullish market sentiment amongst traders investors alike .