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OKX exchange has released its latest proof-of-reserve (PoR) report that shows a dip in users’ Ethereum holdings. According to the report, assets like Bitcoin and Tether (USDT) saw a significant jump, while Ethereum declined month-on-month.
Ethereum liquidity crunch incoming?
OKX released the 37th proof-of-reserve report to maintain its transparency, a new normal among top crypto exchanges.
According to the PoR report, OKX users’ Bitcoin holdings reached 130,439 BTC, a 3.15% surge from the 126,451 BTC recorded in September.
Likewise, the USDT reserve jumped by 7.16% from 10,015,149,297 tokens in September to 10,731,848,196 USDT this month. This figure leaves a variation of 716,698,899 USDT, per the report.
However, Ethereum holders saw an 11,848 ETH shortfall as the 1,622,674 ETH recorded in September dropped to 1,610,826 ETH in the current month.
The shortfall in Ethereum could come as a result of different reasons. While OKX users may be moving their assets to cold storage, it could also be that ETH holders are converting to stablecoins.
Either way, the quantity of Ethereum on the trading platform is shrinking, a reality which, if spread to other trading platforms, can have a net benefit on ETH in the long term.
Good time for ETH liquidity crunch
That the amount of Ethereum on OKX is declining is a good omen in view of the coming Fusaka upgrade on Dec. 3.
This update is billed to shift the paradigm in enhancing user experience and scalability on the broader Ethereum network. Going by past precedence, where the ETH price takes off after a significant upgrade, the likelihood of higher demand for Ethereum is higher in the weeks ahead.
If this prediction plays out and the current ETH drain is sustained, the demand can push the price of ETH up in a significant way.
As of writing, ETH was changing hands for $2,997, down by 1.88% in 24 hours, according to CoinMarketCap data. With the $3,000 level forming the most significant support and resistance, sustaining the level can shift the price of ETH in the long term.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team