Ether worth 1.2 billion withdrawn from crypto exchanges
On Thursday, more than $ 1 billion worth of ethers were withdrawn from central exchanges within 24 hours. This restricts their liquidity and gives room for speculation about imminent price increases.
As the crypto analysis service provider IntoTheBlock reports, Ether worth 1.2 billion dollars was withdrawn from the central exchanges on Thursday. This value represents a new record for short-term stock market outflows. In April it had already been observed that – almost in concert – the equivalent of a round dollar billion in ether had been withdrawn from the stock exchanges within one day. In the following 30 days, the price of the cryptocurrency had risen by 60 percent.
The current situation can only be compared to that in April to a limited extent. Because with the London upgrade, Ethereum also implemented the EIP-1559 improvement proposal. It brings with it a completely new transaction fee model in which large parts of the fees, the so-called base fees, are burned during the transaction, i.e. actually destroyed and thus permanently removed from the system. This means that the stock of Ethereum is growing much more slowly than before. At times, even more ether was burned than mined – the currency became deflationary. However, this is a certain undesirable effect, because EIP-1559 is not conceptually designed in this way.
Well over a billion dollars in ether has been destroyed since the London upgrade. That corresponds to a burn rate of around five ethers or $ 17,500 per minute and around $ 25 million per day.
The statistics dashboard of Ultrasound money shows the NFT marketplace Opensea clearly at the forefront of the ether-burners. In the 42 days since the London upgrade, Opensea alone has already burned around 44,000 ethers and thus around 154 million dollars. This can be explained relatively easily by the fact that an NFT purchase entails a whole bunch of transactions.
Conventional ETH transfers follow in second place with around 27,000 ETH burned (around $ 94 million). Third and fourth places are a head-to-head race: the Uniswap defi exchange managed to burn around 17,000 and the stablecoin Tether to one of around 15,000 ethers. This is followed by the defi-game Axie Infinity with around 9,600 destroyed ethers.
The situation is actually only partially comparable with that in April, because from the point of view of the bulls it is currently much better. If in April an increase of 60 percent was already possible without limiting the inventory, what will happen now? Investor Lark Davies is in good spirits. He sees the ether on its way to the $ 10,000 mark.
Significant outflows from the central exchanges can also be observed with Bitcoin. From its high of 17 percent of the total stock, it has now decreased to 13.1 percent. The stocks on the stock exchanges were last so low in February 2018. This results from data from the on-chain analysis company Glassnode, which also suggests a correlation between rising stock exchanges and falling prices.
