Introduction:
Ethereum (ETH), the world’s second-largest cryptocurrency by market capitalization, is entering a new phase of accumulation and long-term holding. According to recent data from on-chain analytics firm Santiment, Ethereum’s supply on centralized exchanges has dropped to a record low of just under 4.9%—a level not seen in over 10 years. This shift signals growing investor confidence and increasing interest from both retail and institutional players.
With Ethereum’s supply on exchanges dwindling and large wallets accumulating millions of ETH, the market is clearly leaning toward long-term holding rather than trading. Combine this trend with rising ETF inflows, a major network upgrade, and regulatory momentum, and Ethereum is shaping up to be a key asset in the 2025 bull cycle.
Ethereum Supply on Exchanges Reaches 10-Year Low
As of May 19, 2025, Santiment reported that less than 4.9% of Ethereum’s total supply remains on centralized exchanges—a historic milestone. Over the past five years, a staggering 15.3 million ETH has been withdrawn from these platforms. This steady exodus suggests that holders are moving their assets to cold storage, DeFi platforms, or staking solutions rather than preparing to sell.
The low supply on exchanges is typically viewed as bullish because it reduces the selling pressure in the market. When more tokens are held off exchanges, they are less liquid and less likely to be sold during market volatility.
Over 1 Million ETH Withdrawn in One Month
According to CryptoRank.io, more than 1 million ETH has been withdrawn from exchanges in the past 30 days alone. This spike in withdrawals underscores growing trust in Ethereum’s long-term potential, as users increasingly prefer to hold their ETH rather than trade it.
The platform stated: “Users are increasingly choosing to accumulate Ethereum rather than trade it,” pointing to a stronger belief in Ethereum’s future value, especially in light of technological advancements and institutional support.
Ethereum Whales Accumulate Amid Bullish Sentiment
Large Ethereum holders—commonly known as whales—are also piling in. On-chain data shows that wallets holding over 10,000 ETH have accumulated more than 450,000 ETH since late April. By May 10, these whale addresses held 40.75 million ETH, their highest balance since March, according to Santiment.
Whale accumulation is often considered a leading indicator of price appreciation. These wallets typically represent informed investors with significant market influence, and their movements often foreshadow larger trends.
Institutional Interest Grows: ETH ETFs See $30M in Inflows
Institutions are increasingly warming up to Ethereum. Data from SoSoValue shows that U.S. spot Ethereum ETFs experienced net inflows of $30 million over the last month, reversing a prolonged period of outflows. This renewed interest may be attributed to improving market conditions, enhanced regulatory clarity, and Ethereum’s growing use cases.
One of the most prominent institutional players, BlackRock, now holds over $2.9 billion in Ethereum assets under management, further validating Ethereum’s appeal to large investors. The asset manager has advocated for including staking in Ethereum ETFs, arguing that it would provide a more complete investment product by offering yield on top of price appreciation.
Ethereum: A Top Pick for Institutional Diversification
Market analysts and institutional advisors are increasingly viewing Ethereum as the go-to crypto asset for diversification. In a May 12 post, crypto market strategist Adriano Feria wrote:
> “ETH remains the most natural choice for institutional diversification… It’s the only crypto asset with ETF access, regulatory clarity, and built-in yield potential.”
Ethereum’s yield-bearing nature, through staking and decentralized finance (DeFi), gives it an edge over many other cryptocurrencies, particularly for traditional investors seeking long-term, yield-generating assets.
Pectra Upgrade Fuels Network Activity
Ethereum’s bullish momentum is also supported by fundamental improvements. On May 7, the network implemented the long-awaited Pectra upgrade, which optimized data processing and improved efficiency across the Ethereum ecosystem.
One immediate impact has been a surge in Layer-2 network activity. According to L2Beat, Layer-2 chains built on Ethereum—such as Arbitrum, Optimism, and Coinbase’s Base—have seen a 20% increase in transaction activity compared to the previous month. Base, in particular, led the way with over 259 million transactions in the past 30 days.
These improvements bolster Ethereum’s scalability and usability, enhancing its appeal for developers, investors, and end-users alike.
Staking Decision Looms: A Game-Changer for ETH ETFs
The crypto community is now closely watching for a potential U.S. Securities and Exchange Commission (SEC) decision by June 1 regarding staking approval for Ethereum spot ETFs. If allowed, staking would enable institutional ETF holders to earn yield on their ETH holdings, making the funds more attractive to investors seeking passive income.
Several firms, including BlackRock and Fidelity, have lobbied in favor of incorporating staking into ETFs, arguing that it better reflects the full utility of Ethereum. A positive ruling could further catalyze capital inflows into the ETH market.
Arthur Hayes: ETH Will Outperform in 2025 Bull Cycle
Industry veteran and BitMEX co-founder Arthur Hayes recently expressed strong confidence in Ethereum’s outlook. In a May interview, Hayes stated that ETH is poised to outperform Solana (SOL) and other altcoins in the upcoming bull market. He cited Ethereum’s superior security, expansive developer ecosystem, and massive user base as key advantages.
Hayes’ endorsement adds to the growing consensus among analysts who believe Ethereum is not only a cornerstone of decentralized finance but also a dominant player in the broader digital asset landscape.
ETH Price Surges 57% in a Month:
Ethereum’s price performance has reflected this renewed optimism. As of May 20, ETH is trading at $2,535, up 57% over the past 30 days. This rally comes after a significant 45% decline in Q1 2025, highlighting Ethereum’s resilience and capacity for recovery.
The rebound is being fueled by a confluence of positive news—from whale accumulation and institutional inflows to network upgrades and regulatory clarity. These developments suggest that Ethereum is well-positioned for sustained growth throughout 2025.
Conclusion:
Ethereum’s declining exchange supply, surging institutional interest, and strong on-chain fundamentals paint a bullish picture for the second half of 2025. With key upgrades like Pectra boosting scalability and potential regulatory wins around ETF staking, ETH is not only holding its ground—it’s gaining momentum.
As more investors, both retail and institutional, accumulate Ethereum for the long haul, it’s becoming increasingly clear that ETH is emerging as a core asset in the digital economy. The stage is set for Ethereum to play a central role in the next phase of the crypto market’s evolution.
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