Bitcoin and Ethereum, the two largest cryptocurrencies, experienced a drop in their supply on exchanges in June, according to a report by Goldman Sachs citing on-chain data.
Bitcoin and Ethereum Supply on Exchanges Dropped in June
The report emphasized that Bitcoin supply decreased by 4% in June, approaching the levels last seen in December 2022, which is the lowest level since November 2020, just before the start of the 2021 bull market.
Similarly, the supply of Ethereum decreased by 5.8%, reaching levels not seen since May 2018.
Goldman Sachs has identified several factors that lead to this trend. Large central spot exchanges are facing regulatory challenges, making investors cautious about holding their assets on these platforms.
Cyberattacks and thefts continue to be a concern in the crypto market, leading asset holders to opt for self-hiding.
In addition, the most important source of the sharp decline in Ethereum supply is due to the fact that many investors are staking their ETH.
The report also highlighted that June witnessed record Bitcoin sales by miners taking advantage of the cryptocurrency's strong performance.
Total monthly Bitcoin inflows from miners to exchanges almost doubled compared to May, reaching $99 million, while the price of Bitcoin rose by almost 12%.
The report also highlighted an increase in new on-chain activity, with the average daily number of new addresses for Bitcoin and Ethereum increasing by 9.8% and 48.2% respectively compared to the previous month.
The decrease in the amount of cryptocurrencies on the exchanges generally creates a bullish effect on the price, as it reduces the amount of crypto money available for sale.
*Not investment advice.
