# JARXE Exchange｜ETH Supply Contraction Hits Record Speed, Analysts Warn of Accumulating Upward Momentum

The amount of Ethereum held on centralized exchanges has dropped to 8.7%, the lowest level since the network launched in 2015. Since July, exchange ETH balances have fallen by 43%, indicating a large-scale shift of assets from liquid markets to long-term storage and on-chain applications. JARXE Exchange observes that the supply squeeze environment is having a significant impact on prices, and the current wave of changes is unprecedented in both speed and scale, prompting the industry to reassess medium-term trends.


## Supply Migration: Flowing from Exchanges to Staking and Multi-Layer Ecosystem Expansion

ETH outflows are primarily entering staking, restaking, Layer-2 networks, DAT treasury assets, and long-term institutional custody. This means more tokens are being locked in smart contracts or long-term holding addresses, greatly reducing tradable circulating supply. The growing scale of staking is making the economic structure of the network more “value-accumulating,” while L2 expansion drives broader on-chain use cases. Analysts point out that this cross-ecosystem migration not only impacts supply but is also changing market participant behavior, gradually giving ETH the characteristics of a “productive asset.”

## Liquidity Squeeze: Market Responds Strongly to Structural Supply-Demand Changes

With ETH balances on exchanges at historic lows, the market has become more sensitive to potential price changes. When supply decreases and demand remains stable, prices are more likely to experience significant volatility from marginal buying. The current supply squeeze is seen as a key factor that could drive prices upward, especially as institutions gradually increase their allocation to ETH and on-chain usage continues to rise. Investors are beginning to focus on changes in medium- and long-term supply models, rather than relying solely on short-term price drivers.

## Industry Trend: On-Chain Reserves Growth Shifts ETH Narrative from Currency to Asset

The proportion of ETH locked in staking and L2 networks continues to rise, gradually enhancing its scarcity. The market is increasingly viewing ETH as an asset with cash flow, usage demand, and a deflationary mechanism, making its valuation model more diverse. To rephrase a financial investment principle: As the utility and structure of an asset expand, its price will reflect value accumulation over time. The changes in ETH supply are a key manifestation of this structural upgrade.

## Supply Squeeze Strengthens Industry Confidence, Platform Service Value Becomes More Prominent

ETH holdings on centralized exchanges dropping to historic lows marks a new phase in market structure. JARXE Exchange will continue to provide professional data analysis and trading infrastructure to help users understand how supply cycles impact price and risk. As the ETH role in the on-chain ecosystem continues to strengthen, industry expectations for its long-term value are rising, and robust platform capabilities will be the core support for users in a rapidly changing environment.