• Bitcoin supply on exchanges has dropped to the lowest level since 2017.
• The trend of Bitcoins leaving exchanges began in March 2020, when crypto bottomed ahead of the pandemic bull run.
• The current exodus is likely due to fears over security and transparency, heightened after FTX collapsed.
Bitcoin Supply on Exchanges Lowest Since 2017 Bull Market Peak
The balance of Bitcoins on exchanges is now down to 2.27 million, the lowest mark since March 2018. This is 11.8% of the overall Bitcoin supply – the lowest mark since December 2017, when Bitcoin skyrocketed past $20,000 for the first time ever.
Why Are Bitcoins Leaving Exchanges?
The exodus from exchanges began in earnest in March 2020 when crypto bottomed out ahead of the pandemic bull run. People pulled Bitcoin to participate in a vibrant crypto ecosystem with high volumes and activity and much scope for yield. Even as volumes and interest have fallen since then, this pattern of Bitcoin fleeing exchanges has continued – albeit for different reasons. It appears that people are heeding the old warning „not your keys, not your coins“ and taking their funds off centralized platforms out of fear over security and transparency following FTX’s collapse.
What Does This Mean For Crypto?
It’s difficult to say what this will mean for crypto long-term as it could be indicative of a withdrawal from markets or just a temporary shift in preference towards private wallets and decentralized finance (DeFi). However, it could be argued that it shows an increasing level of maturity within the industry – people are more aware than ever before about where they keep their assets, especially following such visible cases like FTX’s failure highlighted above.
Is There Any Risk?
While there is no immediate risk posed by Bitcoins leaving exchanges (aside from increased user responsibility), one potential problem could arise if there is a sudden surge in demand for buying cryptocurrency but no coins available on major exchanges to satisfy it – something which may become increasingly likely as more coins move into wallets away from trading platforms.
All things considered, this ongoing exodus should be seen as a positive sign – people are becoming savvier about keeping their cryptocurrencies safe & secure while also showing faith in digital assets as an investment asset class that can offer great returns without sacrificing safety or privacy concerns associated with traditional financial services platforms