Crypto Exodus: $2 Billion Worth of Bitcoins Withdrawn from Exchanges
Over the past 90 days, approximately 60,000 bitcoins valued at just over $2 billion have been withdrawn from trading platforms. This has resulted in a significant decrease in the number of bitcoins held on centralized exchanges, with only slightly more than 2 million BTC remaining. According to a recent report from Falconx, the swings in the crypto market have been intensified by a persistent lack of liquidity.
Significant Decrease in Bitcoin Holdings on Exchanges
The count of bitcoins on centralized exchanges has reached a multi-year low, with only 36,000 BTC surpassing the 2 million mark. This is a stark contrast to the 2.513 million BTC held on trading platforms as of November 5, 2022.
In less than a year, exchanges have experienced a reduction of 477,000 BTC. By July 31, 2023, approximately 2.096 million bitcoins were held on these platforms. This means that around $2 billion worth of bitcoins, equivalent to 60,000 BTC, has been withdrawn from these exchanges.
Decrease in Ethereum and Stablecoin Holdings
A similar trend can be observed with ethereum (ETH) holdings on centralized exchanges. Data from cryptoquant.com shows that on November 5, 2022, there were 23.14 million ETH held on trading platforms. However, as of October 30, 2023, this number has decreased to 14.57 million ETH.
Additionally, stablecoins have also been taken off exchanges or redeemed by their central issuers. Exchanges that held $35 billion in stablecoin assets last November now only have $17.34 billion. This indicates that more than $17 billion in ERC20-based stablecoins have been either redeemed or removed.
Lack of Liquidity and Increased Market Volatility
The recent volatility in the cryptocurrency market can be attributed to the lack of liquidity. According to Falconx’s report, the crypto market’s depth in 2023 has reached its lowest point, based on Coin Metrics data. As bitcoin’s halving approaches, these liquidity cycles may become even more pronounced.
Hot Take: Decreasing Bitcoin Holdings on Exchanges Indicate Growing Confidence in Self-Custody
The significant decrease in bitcoin holdings on centralized exchanges suggests that more individuals and institutions are opting for self-custody solutions. By withdrawing their bitcoins from exchanges, they gain greater control over their assets and reduce the risk of exchange hacks or insolvency. This shift towards self-custody reflects a growing confidence in the security and reliability of personal wallets and decentralized storage options. As the crypto industry continues to mature, we can expect this trend to continue, further decentralizing the ownership and control of digital assets.
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