- Ethereum (ETH) investors take over control of their assets as self-custody hits an upward trend.
- The low number of ETH sitting on exchanges is reported to indicate a buying trend and a bullish signal.
Ethereum (ETH) is currently trading at $1,641.30 after breaking multiple support levels to fall by 11 percent in the last 90 days. Interestingly, on-chain data suggest that the asset may take a rebound as investors remain bullish on the second-largest crypto.
Data from Santiment discloses that only a few of the ETH tokens currently sit on both centralized and decentralized exchanges with the current figure being within the all-time low range. This implies that investors have taken custody into their own hands. According to data, self-custody has been on the rise since mid-August. The number of non-exchange ETH is currently at an all-time high.
Ethereum saw about 110,000 ETH ($181 million) move off of exchanges Wednesday, the largest outflow day since August 21, 2023. The amount of non-exchange Ethereum now sits at an all-time high of 115.88 million ETH.
In March, it was also reported that 90 percent of existing ETH was off exchanges with just 10 percent sitting on these platforms. That was reportedly the lowest ever recorded since June 2015.
Why Self-Custody is on the Rise
The reason for this development has been linked to the growing trend of investors finding personal wallets more appealing than leaving their assets on exchanges. This behavioral change has been linked to the ongoing legal showdowns and the sudden collapse of some renowned exchanges like the FTX.
Some experts have also associated this with the increasing Decentralized Finance (DeFi) protocols created on the Ethereum blockchain. Through DeFi protocols, users borrow, lend, and trade their assets without the need for third parties.
Another possibility is the increasing confidence in ETH among investors, motivating them to hold their assets for the long term instead of trading on the exchanges. It is also important to note that the decreasing supply on exchanges indicates a buying trend, hinting at a possible price increase.
Ethereum Futures ETF Launch
Analysts have observed that this trend usually triggers a bull run, and that has historically been the case. This, coupled with the recent launch of Ethereum Futures Exchange Traded Funds (ETFs) could trigger a massive rebound.
On October 2, some industry giants including VanEck, and Proshares announced the launch of their ETH products. VanEck stated in the filing that the Ethereum Strategy ETF (CBOE: EFUT) is meant to provide investors an avenue to actively get involved in digital currencies.
Kyle DaCruz, Director of Digital Asset Product with VanEck commented on this:
Ether is the foundation of the decentralized applications ecosystem, and it plays a pivotal role in driving the growth of digital currencies, smart contracts, and more. With EFUT, investors can now access the dynamic futures market linked to Ethereum.
As of press time, ETH was showing signs of growth as the asset made a 1.2 percent surge in the last seven days. An analyst predicts that the minimum the asset can trade before the end of December is $1,966.08. On the average, ETH can trade at $2,457.60. However, it can trade as high as $2,949.12 before the year ends.