Saad Ullah
Shiba Inu cryptocurrency sees a massive decline in exchange holdings as SHIB supply on trading platforms plummets to record lows.
SHIB Exchange Reserve Plummets to Historic Low of 96.6 Trillion
Recent on-chain data published by CryptoQuant reveals that Shiba Inu (SHIB), the second-largest meme cryptocurrency, has experienced a dramatic decline in one of its key metrics – the SHIB reserve stored on cryptocurrency exchanges. According to the report, the all-exchange SHIB reserve has crashed to an unprecedented low of 96.6 trillion SHIB, down from 135,402,530,126,750 SHIB recorded in January 2025.
The downward trend becomes even more pronounced when viewing historical data. In February 2024, the supply of SHIB held across all exchanges stood at 165,824,798,782,284 SHIB. Looking further back to April 2022, exchange-held SHIB totaled nearly 200 trillion meme coins, representing slightly less than half of the circulating SHIB supply at that time.
Price Decline Coincides with SHIB Withdrawals from Exchanges
This significant reduction in exchange reserves has aligned with a major price drop for SHIB. Since December 2024, the meme coin has lost more than 60% of its value, falling from $0.0000329 to the current low of $0.000013, where it is trading at press time. Despite this price deterioration, one potential explanation for the declining exchange reserves could be growing confidence within the SHIB community regarding the cryptocurrency's prospects.
Investors appear to be withdrawing their SHIB holdings from exchanges and transferring them to cold storage solutions, adhering to the old cryptocurrency holder's rule: "Not your keys, not your coins." This movement suggests a long-term holding strategy rather than preparation for immediate selling.
Recent Exchange Hack Accelerates SHIB Movement to Private Wallets
The recent security breach at the Bybit exchange, which resulted in over $1 billion worth of Ethereum being stolen by hackers, has alarmed the SHIB community. This security incident likely prompted many holders to conclude that storing SHIB in private cold wallets would provide significantly better protection than keeping assets on exchanges that remain vulnerable to sophisticated hacking attempts.
SHIB Burn Rate Spikes 49,552% as Exchange Reserves Decline
While SHIB reserves on exchanges have plunged to all-time lows, another closely monitored Shiba Inu metric has demonstrated a massive increase – the burn rate. Over the past 24 hours, the daily burn rate skyrocketed by an astounding 49,552%, with 13,290,880 SHIB meme coins being transferred to unspendable blockchain wallets and permanently locked, according to data shared by the Shibburn data platform.
The majority of this burning activity came from a single anonymous whale who destroyed 12,131,978 SHIB in one transaction. This massive burn follows another significant spike reported just days earlier. On Friday, the burn rate increased by 27,660%, resulting in 503,305,764 SHIB being permanently removed from circulation. During that event, an impressive 459,294,504 SHIB was destroyed in a single transfer.
These simultaneous trends of declining exchange reserves and increasing burn rates suggest significant changes in SHIB holder behavior. The community appears to be adopting more secure storage practices while also supporting initiatives to reduce the total supply of SHIB tokens, which could potentially enhance value over time if demand remains stable or increases.
The dramatic reduction in exchange-held SHIB might also indicate decreased selling pressure in the immediate term, as fewer tokens are readily available for trading on exchanges. However, this must be balanced against the current price performance, which remains challenged despite these potentially positive underlying metrics.
As the SHIB ecosystem continues to evolve, these developments highlight the complex interplay between security concerns, community confidence, tokenomics, and market valuation that characterize the cryptocurrency space.
Saad Ullah
