The exchange supply of $BTC has retreated to approximately 6.6% of the total circulating supply, nearing its lowest level since 2017. Similarly, $ETH’s exchange supply has dropped to its lowest levels since 2015. At first glance, this could be interpreted as “no more coins left to sell—supply shock incoming.” But there’s a critical nuance here: Exchange reserve data is no longer as clear a signal as it once was. This is because, since 2024, ETF holdings, institutional custody accounts, and corporate balance sheets have grown significantly. Coins leaving exchanges do not always mean individual investors have moved them to long-term wallets; sometimes, it simply reflects a change in storage method. Sources such as Glassnode and CryptoQuant attribute part of the reserve decline to this shift toward ETF and institutional custody structures.