- Ethereum reserves on exchanges hit a two-year low, pointing towards rising accumulation.
- BlackRock has reportedly purchased over $50 million in ETH through Coinbase.
- Institutional interest is growing, and ETH needs to break $2,900 to confirm a move towards $4,000.
Ethereum’s supply on centralized exchanges has dropped sharply, hitting a 2025 low of 18.7 million ETH, according to CryptoQuant data. This represents a sharp drop from the above 19.8 million registered earlier in the year, an indication of a shrinking liquid supply. Investor sentiment appears to be shifting away from active trading and towards long-term holding or staking as traders persist in withdrawing ETH from exchanges.
Recent data from CoinGlass supports this trend with continued negative netflows and billions in ETH exited exchanges over the past month. Since mid-May, outflows have been especially aggressive, coinciding with a price rebound above $2,600. Analysts often interpret such trends as bullish and anticipate that the price will appreciate.
At the same time, spikes in exchange outflow of over 344,000 ETH in a single day suggest growing demand for self-custody, staking, and decentralized finance (DeFi) apps. Ethereum’s declining exchange balance exhibits similar patterns as previous rallies that saw the lack of liquid supply driving rapidly higher prices.
Institutional Demand Ramps Up
With a wave of institutional interest, Ethereum’s supply is becoming even tighter. According to on-chain analytics firm Arkham, BlackRock has purchased Ethereum with amounts between $23 million and $61 million each on Coinbase Prime. The total amount that will be allocated is thought to be more than $50 million.
Such high-profile activity cements the growing attraction of Ethereum to traditional financial titans. This comes as a wider institutional exploration into Ethereum’s use case in Web3, DeFi, and programmable finance.
Popular analyst Rekt Capital said that this recent bounce from $2,500 posts a similar setup to what happened in 2021 that pushed the coin past $4,000. ETH will have to first break through the $2,900 resistance to reach that level. According to analysts, if this key level is broken through, it would create a bullish breakout similar to past ‘god candle’ formations.
ETH Activity Extends Beyond Centralized Platforms
While centralized exchange balances are a key market signal, they don’t encompass the full ETH ecosystem. Large portions of Ethereum are now locked in liquid staking protocols (LSDs), layer-2 networks, and smart contracts. However, analysts have said that this structural change greatly limits the volume of ETH available for trading, fueling the supply shortage narrative.
Recently, Ethereum Ethereum CEO Joe Lubin revealed talks with sovereign wealth funds and central banks regarding using Ethereum to build their national infrastructure. The talks suggest governments could consider using Ethereum for asset allocation and not just blockchain services. This further reinforces Ethereum’s stature as a base for decentralized worldwide finance.
Consensys’ $425 million investment into SharpLink Gaming to create an ETH treasury also confirms Lubin’s creation of an ETH treasury as a real-world institutional strategy around Ethereum accumulation.
Despite strong institutional moves, on chain activity of Ethereum has moderated. Currently sitting below 300,000 and actively falling, active address counts are down. While this represents a lower level of retail engagement, analysts say that institutional demand is now the force behind price action and longer-term value.
