$1.2B of ETH Disappeared From Exchanges Yesterday — Or Did It?

Ethereum ETH/USD on-chain metrics are painting a rather bullish picture as exchanges hold less and less of the coin's supply.

What Happened: According to a Thursday tweet by on-chain data firm IntoTheBlock, the net amount of Ether leaving centralized cryptocurrency exchanges just hit a new record of more than $1.2 billion on Sept 15. The last time this metric reached over $1 billion, Ethereum's price increased by 60% within 30 days.

Still, not everyone is fully convinced. One Twitter user raised the question "how do we know large portions of this aren't just exchanges shuffling to their new wallets," to which IntoTheBlock answered that their machine learning-based artificial intelligence algorithms classify the wallets to avoid this from happening. The user was unsatisfied with the answer, highlighting that he cannot verify how well the algorithm classifies the wallet addresses.

Data from competing on-chain data service Glassnode shows no significant uptake in Ethereum's outflow from exchanges on Sept 15.

In fact, the data discrepancy is so great that Glassnode's net transfer volume chart for Ether shows on Sept 15 more coins were transferred onto exchanges than out of them.

It is unclear which data source is right. It is entirely possible IntoTheBlock failed to filter out some crypto exchange's internal transactions or Glassnode wasn't aware of the exchange wallets from which the bulk of the outflow originated.

Despite all of this, Glassnode data still shows the percentage of Ethereum's supply held on cryptocurrency exchanges is in a clear downtrend, suggesting that investors are increasingly deciding to hold it for the long term. This metric currently stands at just under 13%, up from Aug 23's 12.8% but also significantly down from late May's 15.3%.

Image by Peter Patel from Pixabay