Ethereum exchange supply hits record low of 4.9% as investors move to self-custody

The Ethereum exchange supply has plummeted to an all-time low of just 4.9%, signaling a major shift in investor behavior. According to on-chain data from Santiment, this marks a continued downtrend as more ETH holders withdraw their assets from centralized exchanges (CEXs) to private wallets.

Why the Ethereum exchange supply decline matters

The Ethereum exchange supply is a critical metric that tracks the percentage of ETH held on trading platforms. A lower supply suggests investors are moving tokens into long-term storage, reducing immediate selling pressure.

Santiment’s data reveals that over the past five years, a staggering 15.3 million ETH have been pulled from exchanges. In contrast, Bitcoin’s exchange supply has also dropped to 7.1%, its lowest since November 2018, with 1.7 million BTC withdrawn in the same period.

“Investors are increasingly opting for self-custody, likely anticipating future price appreciation,” said a Santiment analyst in an X post. “This trend has been consistent, with only brief interruptions during peak selling periods.”

The role of ETFs and changing market dynamics

While declining Ethereum exchange supply traditionally signals accumulation, the rise of spot Ethereum ETFs could alter its impact. Unlike direct exchange trading, ETFs allow investors to gain exposure without holding the actual asset, potentially reducing the need for large exchange reserves.

“ETFs introduce a new liquidity layer,” noted crypto analyst James Check. “Exchange outflows may not have the same bullish effect as before, but they still indicate strong holder conviction.”

What’s driving the ETH withdrawal trend?

Several factors contribute to the shrinking Ethereum exchange supply:

1. Staking Rewards – Over 26% of ETH is now locked in staking contracts, incentivizing long-term holding.

2. Regulatory Uncertainty – Recent SEC scrutiny over crypto exchanges has pushed users toward self-custody solutions.

3. Bull Market Anticipation – Many investors are holding ETH in anticipation of the next major price rally.

“People are realizing that keeping ETH on exchanges exposes them to risks like hacks or platform failures,” said Meltem Demirors, Chief Strategy Officer at CoinShares. “Self-custody is becoming the norm.”

Market reaction and price outlook

Despite the declining Ethereum exchange supply, ETH’s price has struggled recently, hovering around $2,500, down 2% over the past week. However, historical trends suggest that prolonged exchange supply drops often precede upward price movements.

“If this trend continues, we could see a supply shock,” predicted Lex Sokolin, Chief Economist at ConsenSys. “Fewer tokens on exchanges mean higher volatility when demand spikes.”

The big question: Will ETH break out?

With the Ethereum exchange supply at record lows, the stage may be set for a major price surge—if demand catches up. Analysts are watching key resistance levels, with some predicting a push toward $3,000 if bullish momentum returns.

As the market evolves, one thing is clear: Ethereum holders are voting with their wallets, and their message is long-term confidence.

Key points:

• Ethereum exchange supply at 4.9%, the lowest ever.

• 15.3 million ETH withdrawn from exchanges in five years.

• ETFs may change how exchange supply impacts prices.

• Staking and security concerns driving self-custody trend.

Will the shrinking Ethereum exchange supply trigger the next bull run? Only time will tell—but the data suggests investors are betting big on ETH’s future.