The exchange supply of Ethereum, the second-largest cryptocurrency by market capitalization, has steadily decreased over the last six months following the Merge. In September 2022, the Ethereum network experienced a significant upgrade known as the Merge, switching from a proof-of-work (PoW) network to a proof-of-stake (PoS) network.

Santiment, a crypto analytics company, published on-chain statistics showing a continued decline in the quantity of ETH that is available on exchanges. 37% less ETH has been traded on exchanges since the Merge. When there is less ETH available to buy or sell, a continuous fall in supply on exchanges is regarded as a positive indication.

Before the Merge, there were 19.12 million ETH in total, valued at $31.3 billion, on exchanges. In the second week of February, there were 13.36 million ETH, valued $19.7 billion.

With the Shanghai upgrade soon, a sizable portion of the ETH supply is being transferred into self-custody, however many traders still favor staking. March will see the release of Shanghai, the next Ethereum upgrade. Stakeholders and validators will be able to remove their holdings from the Beacon Chain during the Shanghai hard fork, which will also incorporate further suggestions for network improvements.

16 million ETH, or 14% of the supply, are currently staked on the Beacon Chain; at current prices, this represents a sizeable sum that will gradually become liquid following the Shanghai hard fork, equal to almost $25 billion.

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