As Ethereum approaches the $5,000 level, ETH reserves on exchanges continue to decline. According to on-chain data from CryptoQuant, investors pulled out roughly $6.2 billion worth of assets in the past month alone.
Looking further back, the shortage becomes even clearer: since the beginning of the year, Ethereum reserves on exchanges have fallen from 20.04 million to 17.18 million ETH — the lowest level since 2016.
Currently, only 14.2% of circulating Ether remains on platforms such as Binance, Coinbase and others. At first glance, this suggests that more investors are turning to self-custody, following the principle: “Not your keys, not your coins!”
But it’s not only retail investors shaping this trend. Ethereum Spot ETFs and crypto treasury firms have also played a major role. After a record-breaking summer, ETH index funds attracted another $638 million just this week.
Meanwhile, Ethereum-focused treasury firms are rapidly building reserves. For example, Tom Lee’s Bitmine holds 2.1 million ETH worth about $9.6 billion, making it the largest holder. In the overall crypto treasury ranking, the former Bitcoin miner comes second only to Michael Saylor’s MicroStrategy.
Traditionally, shrinking ETH balances on exchanges are viewed as a bullish signal. When supply decreases while demand remains steady or rises, it sets the stage for further price appreciation in the medium and long term.
According to crypto billionaire Arthur Hayes, Ethereum’s potential is far from exhausted. He predicts ETH could reach $10,000–20,000 “within this cycle.” At the same time, he warns inexperienced investors that unrealistic expectations and hype can lead to losses.