ETH/BTC Exchange Rate Hits 14-Month Low - Whales Continuously Deposit ETH on Exchanges

Despite the overall crypto market downtrend affecting all coins, Bitcoin (BTC) appears to be holding stronger compared to Ethereum (ETH).

ETH/BTC Exchange Rate Reaches New Low
According to CoinDesk data, one of the most closely watched trading pairs in the crypto market, ETH/BTC, recently hit its lowest level in the past 14 months.

Specifically, the ETH/BTC exchange rate on Binance dropped to 0.0602s on September 19, a price point not seen since July 2022, during the liquidity crisis following crashes of LUNA-UST and Three Arrows Capital - Celsius - Voyager.

ETH/BTC 1D Chart on Binance at 09:45 AM on September 20, 2023

The downtrend in the ETH/BTC rate has been evident since September 2022, shortly after The Merge event.

Declining Ethereum On-chain Activity
Research by Matrixport attributes the continuous decline in the ETH/BTC rate to the decreasing transaction fee revenue (gas fees) on the Ethereum blockchain over the past three months due to reduced on-chain activity. Matrixport forecasts that without new developments, Bitcoin's price will continue to outperform most altcoins.

Transaction Fee Statistics on Ethereum from early 2023 to date. Source: Token Terminal

With transaction fees plummeting, the burn fees from EIP-1559 have also decreased, causing Ethereum's network to return to an inflationary state as newly minted coins surpass those burned since early September.

Supply Dynamics of ETH in the last 30 days. Source: ultrasound.money (20/09/2023)

Data from The Block also shows that on-chain trading volume on DEX platforms is at its lowest since December 2020.

Monthly trading volume on DEX platforms. Source: The Block (20/09/2023)

Ethereum Whales Deposit $60 Million ETH on Exchanges
Furthermore, another concern for Ethereum investors is the continuous large deposits ("whales") onto exchanges this week, totaling $60 million in ETH.

According to Lookonchain, an ETH wallet inactive for the past two years suddenly woke up and deposited nearly $50 million on Binance, OKX, and KuCoin on September 19.

The day before, an ETH wallet receiving ETH from a 2015 ICO (when ETH was only $0.31) also deposited 6,000 ETH (worth nearly $10 million) on Kraken.

Even Ethereum co-founder Vitalik Buterin has made a series of transactions depositing over $5 million worth of ETH on exchanges in the past month, reasons for which remain unclear.