Exchanges See Bitcoin Withdrawals Exceed Deposits For Three Consecutive Months
Did you know that exchanges have experienced a continuous trend of net Bitcoin withdrawals for the past three months? This is the longest streak in the history of this digital asset. According to an analyst on Twitter, the number of Bitcoin withdrawals from exchanges has been higher than the number of deposits. To clarify, deposit transactions refer to transfers from self-custodial wallets to central exchange entities, while withdrawals go in the opposite direction.
A graph depicting the trend of Bitcoin exchange withdrawals and deposits over the years shows that withdrawals have been consistently higher than deposits for the past three months. This is unprecedented, as deposits usually surpass withdrawals in no time when this pattern emerges.
Interpreting the Unusual Run of Withdrawals
There are several hypotheses that could explain this unusual trend. One possibility is that Bitcoin holders are choosing to hold onto their coins for longer periods instead of engaging in trading or selling on exchanges. Another explanation could be that investors have become more cautious of central entities and prefer the security provided by self-custodial wallets, given recent bankruptcies in the industry.
Alternatively, it is also possible that withdrawals are normal, but deposits have decreased as holders refrain from selling their coins through these platforms. Lastly, regulatory changes in the US may have led investors to keep their assets off exchanges to avoid potential complications, especially in light of recent scrutiny faced by major exchanges like Binance.
Analyzing Exchange Reserves
A separate analysis of Binance and Coinbase, the two largest exchanges, reveals interesting trends in their Bitcoin reserves. Binance has seen growing reserves over the past year, but recently, the exchange has experienced net withdrawals. On the other hand, Coinbase has been witnessing withdrawals for some time, indicating a continuous outflow of coins from the platform.
Bitcoin Price Update
In terms of price, Bitcoin has remained relatively stagnant, hovering around the $25,900 mark.
Hot Take:
The sustained period of net Bitcoin withdrawals from exchanges raises questions about the market’s behavior and investor sentiment. It suggests a shift in preference towards self-custodial wallets and highlights the need for further examination of the impact of regulatory changes on the cryptocurrency industry.
By
By
By
By
By