Bitcoin and Ethereum in stock exchanges hit bottom

While Ether (ETH) repeats its all-time record, Bitcoin (BTC) price has risen again. During this period, the amount of ETH and BTC held in the largest cryptocurrency exchanges also decreased significantly.

Data such as the amount of ETH and BTC locked in decentralized finance (DeFi) protocols, rising number of transactions, decreasing BTC and Ether reserves show that investors are becoming more and more interested in cryptocurrencies.

According to data from on-chain analytics firm CryptoQuant, when the price of Ether hit an all-time high above $ 1,500 on February 2, the amount of Ether held in reserves of all central exchanges fell to the lowest levels. In other words, investors pulled their ETH to their personal wallets, confident that the price would go up further.

ETH reserves in exchanges and price comparison. Source: CryptoQuant

Many analysts believe that the rapidly expanding DeFi sector, the launch of Eth2, and the increased interest of institutional investors are the main reasons for the decline in the amount of BTC and Ether held on central exchanges.

The rise of DeFi and yield farming

The number of participants who interact with the DeFi industry every week is breaking records. As reported by Cointelegraph, the total assets locked on DeFi platforms exceeded $ 30 billion.

Total assets (US dollars) locked on DeFi. Source: Defi Pulse

Defi Pulse data shows that most of the DeFi platforms are built on the Ethereum network and Ether transactions are done on the protocols.

Thanks to users who earn returns by lending Ether, a significant portion of the current supply is directed to the DeFi sector and cannot be used for commercial purposes.

Those who want to join the DeFi domain without selling their bitcoins are switching to ERC-20 synthetic versions of Ether.

BTC balances in exchange wallets. Source: Glassnode

Thanks to platforms like REN and BadgerDAO, there is a similar decrease in the current Bitcoin supply, and this shortage of supply can help the price rise.

Eth2 and extended locked staking transactions

Since the Beacon chain was launched on December 1, 2020, they have become the network validators of token holders and can share their Ether through the new PoS (Proof-of-Stake) consensus algorithm.

Eth2 Launch Pad data shows that currently there are 2,907,298 Ether on the network with a total value of $ 4.39 billion, earning an estimated APR (Annual Percentage Rate) of 9.2 percent.

Estimated annual percentage rate comparison with the total ETH mentioned. Source: Eth2 Launch Pad

With the continued growth of DeFi, the appeal of the Eth2 contract, and the increasing participation of institutional investors, the signals that the price of ETH may continue to rise.

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