According to data presented by Santiment, 1/3 of the circulating Ethereum supply has been moved from exchanges to personal wallets. From Sept. 26, 2020, to this day, the circulating supply has been reduced from 24% to 16%, totaling an 8% loss in a year. The main reason for such a trend is the update of the coin's network and a rapid price increase.
Ethereum price increase
Accumulation periods usually accelerate after the price of an asset has rapidly increased, which makes investors move funds away from the exchange since they are not willing to sell them. Traders usually hold money on exchanges whenever they are willing to sell their assets.
Since Sept. 2020, when exchange supplies have started to decrease, the Ethereum price has risen by almost 1,000%, with the average entry being $1,800-$2,000 on the network. The majority of Ethereum holders are currently holding their coins with a 69% profit.
The period of accumulation is considered over after on-chain data started reflecting a rapid exchange inflow increase. Usually, after the accumulation period is replaced by spending cycles, the price of underlying assets drops significantly.
Alternative investment options presented
Compared to the previous 2017 bullrun, Ethereum has stepped further in development with the announcement of various alternative investment options like liquidity provision and lending. That is why, in some cases, investors choose to reinvest their coins rather than keeping them on exchanges or selling them.
The total value locked in the DeFi industry is currently staying at $85 billion, with a $95 billion TVL ATH reached on Sept. 6. The current trend indicates that Ethereum holders prefer holding their assets in either personal wallets or DeFi smart contracts, rather than exchanges.