The state of crypto – June 2023 The state of crypto – June 2023 The state of crypto – June 2023

The state of crypto – June 2023

Mads Eberhardt

Cryptocurrency Analyst

Summary:  The balance of Ethereum on exchanges hits an all-time low upon the Shanghai hard fork, allowing stakers to unstake Ether. The lower exchange balance indicates that less Ether is immediately available to hit the market, suggesting an improved market sentiment. On the other hand, while Bitcoin’s circulating supply of the past 5 years continued to decline, Ether holders kept discovering dormant Ether to greatly increase the circulating supply in the last 5 years, driving a rise in the real Ether supply.

Immediately upon interacting with a blockchain, much data becomes publicly available on a public ledger. Analyzing this data may provide crypto traders and investors with helpful insight into the present state of the market. In “The state of crypto”, we take a look at the most important metrics to observe the market based on transaction and trading activity. Our main focus is the two largest cryptocurrencies Bitcoin and Ethereum, and we divide the metrics into short-term and long-term indicators. You find the report for the last month here.


The balance of Ether on exchanges is at an all-time low amounting to 9.9% of the total circulating Ethereum supply. We largely attribute the decline in Ether exchange balances to the Shanghai hard fork in mid-April, which at long last provided stakers with the option to unstake Ether. This option has provoked a reshuffle of staked Ether, along with an overall increase in the amount of staked Ether. This has caused more Ether to be withdrawn from exchanges to be staked elsewhere.

One is the direct implication of the Shanghai hard fork; another is the market sentiment. The Shanghai hard fork was a risk-off event for Ethereum by fully finalizing Ethereum’s transition to proof-of-stake from proof-of-work known as the merge, ensuring that Ether may be unstaked, some of which have been staked for about 2.5 years. Together with Ethereum’s negative supply growth by cause of high demand for its block space, it is likely that the overall view on Ethereum has turned more positive, causing many to accumulate Ether before withdrawing it from exchanges. This is further stressed by the fact that Ethereum was up by 7.6% relative to Bitcoin in May.

With respect to Bitcoin, it likewise experienced a decline in exchange balances, although not as significant as Ethereum. Both cryptocurrencies saw fewer exchange inflows relative to March and April this year, in which months, though, the price volatility was greater, which led to more crypto constantly being shifted from one exchange to another.

Exchange Balance in Percent. During times when crypto investors are more inclined to sell crypto, they often store their cryptocurrencies directly on an exchange to prepare to sell their holdings. On the contrary, they often move the funds to private wallets when they are less likely to liquidate them. In other words, low exchange balances on exchanges are often perceived as valuable for a potential upward trajectory. Source: Santiment
Exchange Inflow. This metric solely concerns the total deposit of Bitcoin and Ether to exchanges without considering the withdrawal of funds. By only considering deposits, we may better interpret what leads to sell pressure. Source: Santiment
Dormant Circulation. Shows how many Bitcoins and Ether were moved after not being moved for at least 365 days prior to that – accumulated on a daily basis. A high number may express eagerness from long-term holders to liquidate their portfolios. Source: Santiment
Supply Distribution for BTC. This illustrates the supply distribution in percent of Bitcoin and Ethereum based on the amount addresses hold. This may indicate which groups are buying or selling, for instance, whether whales are selling or buying. Source: Santiment
Supply Distribution for ETH. Source: Santiment


Identical to last month, Ether holders continued to discover truly dormant Ether not touched for over 5 years. This key metric is at a 6-month high, so 107.24mn Ether has been transferred in the past 5 years relative to a total supply of about 120.25mn Ether. We regard it predominantly as a result of the Shanghai hard fork, as the latter has set off dormant wallets to start staking. By that, the real circulating supply must again be raised to reflect the significant increase in the circulating supply of the past 5 years. In the same period, Bitcoin’s circulating supply of the last 5 years decreased.

In May, crypto ETPs, mutual funds, OTC trusts, and other exchange-traded crypto products experienced an outflow. This was primarily due to a substantial outflow from exchange-traded products of Bitcoin amounting to a net outflow of around $113.2mn. Ethereum saw an outflow equal to $9mn.

Circulating Supply (5 years). For Bitcoin and Ethereum, there are continuously issued new Bitcoins and Ether to the supply, respectively. However, it may be the case that someone is permanently unable to access their wallet, which means the supply technically is lower. By looking at Bitcoin’s and Ethereum’s supply that has moved in the past 5 years, we might better interpret the authentic supply and whether large inactive wallets suddenly turn active. Source: Santiment
Market Value to Realized Value (MVRV) Ratio (5 years). The market value to realized value ratio (MVRV) calculates the average profit or loss of all holders based on when each token last moved over the past 5 years. For example, if the MVRV ratio is 1.5, holders are on average estimated to be up by 50%. Source: Santiment
Inflow and Outflow in ETPs, mutual funds, and OTC trusts. CoinShares publishes a weekly report on inflow or outflow into crypto ETPs, mutual funds, and OTC trusts. Since these products are particularly popular among more traditional investors, an inflow or outflow may describe the sentiment among this group of crypto investors.
Source: Saxo Group
Source: Saxo Group


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