As the supply of ETH becomes increasingly tight, Ethereum is being withdrawn from exchanges at a faster rate than Bitcoin, with only 8.84% currently held on exchanges. Data obtained from Glassnode and CryptoQuant shows that the amount of ETH still held on exchanges is almost half (14.8%) of BTC.
Leon Weidman, head of research at the Onchain Foundation, said that one of the main reasons why ETH supply on exchanges is decreasing is staking, with the majority of it being locked up in staking contracts. He also noted that while DeFi is pulling ETH from exchanges, long-term holders are not selling their ETH.
However, Lucca Russell, Head of Digital Asset Ventures at MPM Labs, believes that comparing ETH and BTC exchange balances ignores the fact that the two have different capabilities. On the other hand, Derek Little, founder and CEO of Innovative App World LLC, agrees that the reason more ETH is leaving exchanges than BTC is its utility. There is little to argue that the crypto hype cycle is over, and interoperability is now primarily an issue.
Ether holders move, sell, and spend more than BTC investors
November data obtained from Glassnode reveals that ETH holders are moving, selling, and spending more funds than BTC investors. The on-chain crypto data aggregator highlighted that the reason behind the mass exchange withdrawal of ETH is that its network is powering crypto applications and utilizes ETH as gas fees.
Meanwhile, Glassnode says BTC holders tend to keep their coins in a vault and treat them as digital gold. The blockchain data firm noted that BTC moves less frequently than ETH and behaves more like a digital savings asset. Over 61% of BTC’s circulating supply has been dormant for over a year.
In contrast, ETH acts as a digital oil and therefore rotates supply almost twice as fast as BTC. ETH is also being actively used as collateral and network fuel source as well as being stockpiled, reflecting a more active capital base.
According to Glassnode, ETH's recent actions also reflective It takes advantage of the network's inherent properties as a high-transaction platform for smart contracts. Long-term ETH holders are also mobilizing older tokens at nearly three times the rate of long-term Bitcoin holders, indicating ETH's utility-driven behavior. ETH movements suggest that long-term ETH holders are more willing to part with their coin than BTC holders
Ether exhibits both utility and store of value behavior
Almost 25% of ETH is locked in ETFs and native staking as this coin exhibits both utility and store of value behavior. ETH, on the other hand, trades at double the rate of BTC, reflecting the coin's dual nature as an accumulative and productive digital asset.
Ether is also powering the DeFi ecosystem, with approximately 16% of the ETH supply currently deployed within liquid staking and collateral structures. Glassnode also points out that this highlights ETH's dual role as working collateral supporting DeFi and as a reserve asset.
According to Glassnode, ETH combines SoV-like anchoring through ETF holdings and native staking with productive use across DeFi. A notable percentage of ETH participates in collateralized loans, liquidity pools, perpetuity, restaking, and LST/LRT structures.
ether too Continue Leaving institutional wrapping paper and replacement for long-term storage. Ethereum's share on exchanges is showing an even steeper decline as ETH balances on exchanges are depleted due to ETF adoption and DAT accumulation. ETFs currently account for 5.24% of ETH supply, while DAT has accelerated this year to approximately 4.9% of ETH supply.
