Bitcoin and Ethereum Supply on Exchanges Decreased in June: Goldman Sachs

Summary: Goldman Sachs' study found that the supply of bitcoin and ether on exchanges decreased in June. Bitcoin experienced a 4% decline, reaching its lowest level since November 2020, and Ethereum hit a low of 5.8%. Monthly address activity for bitcoin and ether rebounded, with an increase in new on-chain activity.

According to Goldman Sachs, which used on-chain statistics in a study published on Tuesday, the supply of bitcoin (BTC) and ether (ETH) on exchanges decreased in June as increased regulation and scams encouraged holders to choose self-custody.

Bullish Momentum Ahead?

Bitcoin, the biggest cryptocurrency by market size, had a decline of 4% in supply, bringing it close to the level of December 2022, which was the lowest since November 2020 and came just before the start of the 2021 bull market. With a 5.8% drop, Ethereum supply hit a low not seen since May 2018. The bank claims that a variety of reasons are supporting this development.

The report stated:

“Major centralized spot exchanges are facing regulatory headwinds putting investors on alert, cyber hacks and theft continue to be a concern across the crypto markets, highlighting asset holders’ preference for self custody, in line with the popular adage ‘not your keys, not your coins’, and specifically for ether, the enablement of staked ether withdrawals has resulted in investors’ preference to stake ether, instead of passively holding on exchanges.”

Bitcoin miners took advantage of the cryptocurrency’s high performance in June to sell record amounts of piled up BTC, according to Goldman. From May to June, the total amount of Bitcoin mined and sent to exchanges almost quadrupled to $99 million. TradingView statistics reveal that the price of bitcoin increased by over 12%.

Adoption on the Rise

Monthly address activity for bitcoin and ether rebounded, increasing 15.5% and 37.5% respectively, as transaction costs returned to normal in June after the network congestion witnessed in May. Goldman found that month-over-month, both average daily ether burnt and fees decreased by 65.1% and 63.3%, respectively.

The paper also noted an increase in new on-chain activity last month, with the daily average number of new Bitcoin and Ether addresses jumping by 9.8 and 48.2 percent, respectively, over the previous month.

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