Holders of Bitcoin and Ether are taking control: Supply is falling


  • Bitcoin and Ether miners are not that reliable in sending tokens to exchanges according to a report from Goldman Sachs.
  • The lack of interest may stem from growing regulatory scrutiny of exchanges.

Goldman Sachs Group Inc has pointed to a significant drop in total monthly Bitcoin (BTC) and Ether (ETH) inflows from miners to Centralized Exchanges (CEXs) in June in a new report. According to the report, BTC supply fell 4% in June, close to the level it recorded in December 2022.

Notably, the December level can be labeled as a relatively lower point compared to the November 2020 level. Ether supply, on the other hand, fell by 5.8% to the level last seen in May 2018.

According to the report, Bitcoin inflows from miners to CEXs totaled nearly $99 million in June.

From all indications, most BTC and ETH miners have opted for self-custody as the preferred option for their crypto assets. They have now moved to staking, which allows for passive returns while storing their assets.

This migration to self-custody can be attributed to the crackdown on crypto exchanges by the US Securities and Exchange Commission (SEC). The most recent of these actions was the lawsuits filed against the Binance and Coinbase duo for listing unregistered securities.

Unfortunately, these enforcement measures have had a negative impact on the broad crypto market, as evidenced by the delivery of these two mega digital currencies.

Crypto users choose self-custody for Bitcoin and Ether

Also, crypto users seem to have lost confidence in centralized exchanges due to a growing number of attacks on various platforms. Crypto users are not about to face the risks of hacks and carpet pulling on their favorite CEXs given the saying ‘not your keys, not your coins’.

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A few days ago, the leading Decentralized Finance (DeFi) platform Poly Network was exploited by hackers who manipulated the protocol to issue billions of tokens, including the dog-like Shiba Inu (SHIB), Binance USD (BUSD), and Binance Coin (BNB) . .

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Notably, this has not impacted overall interest in either BTC or ETH, but investors are now more optimistic about both crypto assets. Crypto investors are filling their coffers with more digital assets, especially with the recent embrace of institutional investors. Institutional demand for crypto has surged to significant levels in recent weeks after asset manager BlackRock applied to list a spot Bitcoin Exchange Traded Fund (ETF).

As a major investment asset manager known for its impeccable reputation and stature, BlackRock’s efforts to file its spot Bitcoin ETF filing with the SEC sparked great desire among other corporate asset managers. At the time of writing, no spot BTC ETF has been approved by the SEC, but the effect of the positive sentiment on the broader crypto market is undeniable.

In terms of on-chain activity, both crypto assets performed well and in June the results were excellent. The explosive development of Decentralized Finance (DeFi) on Ethereum and the increasing use of Bitcoin Ordinals Inscription, the so-called BRC-20 standard, are believed to have contributed to this increased on-chain activity.

The Goldman Sachs report also shows that BTC and ETH monthly address activity increased by about 15.5% and 37.5% respectively in June. The average daily Ethereum burn fell 65.1% and the average daily cost fell 63.3% month over month.

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