Historic Ethereum Outflow Hits Cryptocurrency Exchanges
Nearly $600 Million Worth of Ethereum Has Left Exchanges, Marking the Largest Outflow in Two Years.
ETH Outflows from Exchanges
A total of 224,410 ETH left cryptocurrency exchanges on February 8 and 9, according to a report from analytics firm Santiment. This is one of the largest withdrawals in nearly two years.
Usually, when the number of Ethereum on exchanges declines, this can be a sign that investors are hoarding rather than selling, reducing selling pressure on the market. This is seen as a positive signal for ETH prices in the long term.
Santiment also noted that while this outflow does not have an immediate impact on price, it reduces the risk of a sell-off and demonstrates investors' confidence in Ethereum's growth potential.
While this is a long-term measure, the decline in ETH on exchanges is a positive sign for the asset's value. The shrinking supply available on the market also reduces the risk of a major sell-off in the future, Santiment noted.
Ethereum ETFs See Strong Inflows
While ETH is leaving exchanges, capital is pouring into Ethereum exchange-traded funds (ETFs).
Data from February 10 shows that total inflows into major ETH ETFs have reached nearly $7 billion, representing a 4% increase. Notably, BlackRock's ETHA and Fidelity's FETH have attracted $4.42 billion and $1.51 billion, respectively.
Grayscale's ETHE fund, however, saw outflows of around $3.95 billion, according to data from SoSoValue.
At the time, ETH prices had fallen to $2,600, after previously peaking at $2,800 on February 9.
A Shift in Investor Interest
In addition to trading data, Santiment analysts also noticed a shift in the crypto community's interest.
Currently, investors' attention is gradually shifting from meme coins like Dogecoin, Shiba Inu and Pepe to Layer 1 assets like Ethereum, Solana, Toncoin and Cardano, Santiment said.
According to the data, the proportion of discussions about Layer 1 projects has increased to 44.2% of all conversations about cryptocurrencies. Meanwhile, interest in meme coins is decreasing on social media.
Experts say that this shift is a sign that the market is entering a more sustainable development phase, with interest focused on projects with high practical value instead of speculating on highly volatile coins.
There will be new opportunities to invest in meme coins, but the current trend shows that the market is in a more stable phase, Santiment said.
Why This Matters
Ethereum is still lagging behind Bitcoin in this growth cycle and has not yet could surpass BTC in terms of price growth. However, analysts predict that when Bitcoin peaks in this cycle, a new boom could take place in the altcoin market, including Ethereum.
The decline in ETH supply on exchanges, combined with the inflow of funds into ETFs, could be important signs of a sustainable growth trend for Ethereum in the near future.