The diving levels of cryptocurrency supply, particularly Bitcoin (BTC) and Ethereum (ETH), on exchanges during June stand as a testament to the growing preference of cryptocurrency holders to opt for self-custody, as asserted by Goldman Sachs in a recent study. The study cites regulatory uncertainties and emerging cybercrime as prime motivators behind this trend.
The dwindling supply of the leading cryptocurrency, Bitcoin, dropped another 4%, almost matching the levels observed in December 2022, the lowest since November 2020. Likewise, Ether’s supply levels retraced 5.8% to levels reminiscent of May 2018.
The increase in regulations imposed on mainline spot exchanges, cyber threat realities plaguing virtual asset markets, and the popular crypto adage ‘not your keys, not your coins’ playing in the back of investors’ minds are the key catalysts for this shift towards self-custody. Particularly for Ether, the ease of withdrawing staked Ether has induced investors to stake, rather than merely hold on exchanges.
An interesting highlight of June was the stock clearance of Bitcoin by miners. Crypto miners capitalised on Bitcoin’s impressive performance and increased their sales. The total inflow of Bitcoins from miners to exchanges almost doubled from May, amounting to $99 million.
Despite the ensuing supply drop, both Bitcoin and Ether recorded a remarkable uptick in address activities, while transaction fees returned to their normal figures following the network congestion witnessed in May. Address activity shot up by 15.5% for Bitcoin and a massive 37.5% for Ether.
However, Ether’s daily burn rate plummeted by over 65%, and daily transaction fees marked a downward spiral of 63.3%. This reversal of fortune can be ascribed to the normalisation of transaction fees.
A positive indicator for the vitality of the crypto space came from increased new on-chain activities. June saw a rise in the daily average of newly-added addresses. Bitcoin’s fleet of new addresses rose by 9.8%, while Ether trumped this with a striking 48.2% growth, a reassuring sign of enduring interest in the evolving world of cryptocurrencies.
Source: Coindesk
