Supply of bitcoin, the largest cryptocurrency by market cap, dropped 4%, nearing the level of December 2022, itself the lowest since November 2020 – and right before the start of the 2021 bull market, the report said. Ether supply slid 5.8% to levels not seen since May 2018.
This trend is underpinned by a number of factors, the bank said.
“Major centralized spot exchanges are facing regulatory headwinds putting investors on alert, cyber hacks and theft continue to be a concern across the crypto markets, highlighting asset holders’ preference for self custody, in line with the popular adage ‘not your keys, not your coins’, and specifically for ether, the enablement of staked ether withdrawals has resulted in investors’ preference to stake ether, instead of passively holding on exchanges,” the report said.
Goldman noted that June was a record month for bitcoin miners’ inventory sales as miners took advantage of the cryptocurrency’s strong performance. Total monthly BTC inflows from miners to exchanges almost doubled from May to $99 million, it said. The bitcoin price rose almost 12%, TradingView data show.
As transaction fees returned to normal in June following the network congestion seen in May, monthly address activity for bitcoin and ether saw a rebound, gaining 15.5% and 37.5% respectively, the report added. Average daily ether burnt fell by 65.1% and average daily fees dropped by 63.3% on a month-on-month basis, Goldman noted.
Last month also saw an increase in new on-chain activity, with the daily average new address count for bitcoin and ether increasing by 9.8% and 48.2% compared with a month earlier, the note said.
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