Bitcoin’s Exchange Supply Declines
Bitcoin briefly reached $38,400 before pulling back to around $38,000. Interestingly, the supply of Bitcoin on exchanges is decreasing as more investors opt for self-custody solutions. This shift coincides with a decline in the reputation of centralized cryptocurrency exchanges.
According to Santiment’s analysis, the overall supply of Bitcoin on exchanges is currently at its lowest level since December 2017, standing at 5.38%. This trend is seen as bullish by many investors who believe that Bitcoin will experience further gains as regulatory challenges for centralized exchanges continue to mount.
Tether’s Top Exchange Addresses Soar
In addition to the decline in Bitcoin supply on exchanges, Tether’s top exchange wallets are experiencing a surge. These wallets collectively hold $15.23 billion, indicating a significant increase in exchange buying power.
While an increase in the supply of Tether on exchanges might suggest higher selling activity, it is important to note that Tether is a stablecoin widely used in the crypto market and maintains its value pegged to the US Dollar. Many investors choose to hold their funds in stablecoins like USDT to mitigate volatility and plan to re-enter the market when conditions are more favorable. Consequently, purchasing assets like Bitcoin using Tether can have a bullish impact on market prices.
Hot Take: The Shift Towards Self-Custody and Its Impact
The diminishing supply of Bitcoin on centralized exchanges and the rise in Tether’s exchange wallets highlight a significant shift towards self-custody solutions among crypto investors. This trend is driven by regulatory setbacks faced by centralized exchanges and a desire for greater control over one’s assets.
As more investors choose self-custody options, it could lead to increased liquidity challenges for centralized exchanges. Additionally, the reduced supply of Bitcoin on exchanges may contribute to a supply-demand imbalance, potentially driving up the price of Bitcoin.
Overall, this shift towards self-custody signifies a growing confidence in the security and reliability of personal wallets and marks an important milestone in the evolution of the crypto industry.
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