Bitcoin BTC
-2.50%
Exchange holdings fell to their lowest in weeks, indicating an increase in investors removing coins as part of long-term holding strategies.
According to CryptoQuant data, the average amount of Bitcoin on major centralized exchanges remained around 2.04 million coins for most of December. However, there has been an outflow of over 33,000 bitcoins in the last 24 hours, leaving exchange reserves at a multi-week low of just over 2 million bitcoins. Coinbase alone saw more than 19,000 bitcoins leaked in the past 24 hours, according to CryptoQuant data.
Bitcoin outflows from exchanges to cold storage are a trend that has continued throughout the year, driven by rising prices for the digital asset and growing expectations about the possible approval of a spot Bitcoin ETF. According to CryptoQuant, Bitcoin exchange holdings in January 2023 hovered around 2.2 million coins, a decrease of about 200,000 coins since the beginning of the year.
Potential weakening of supply-side pressure
As the number of coins on exchanges decreases, supply-side pressure weakens and the potential for price increases increases. One analyst interpreted the on-chain transfer of $1.4 billion worth of Bitcoin from exchanges to cold wallets in the past 24 hours as a sign of declining trust in centralized currency systems.
“Confidence in global markets is driven by historic debt-to-GDP ratios that are collapsing so-called developed countries like the United States,” said Volcano Energy, Chairman of Volcano Energy and Advisor to President Nayib Bukele of El Salvador. “Bitcoin is leaving exchanges as trust in the fiat currency system is collapsing,” he said. max kaiser told the block.
He added: “Storing wealth in Bitcoin, the perfect inseparable money, is now understood to be the only chance for the world’s wealthy to survive the new deepest recession.”
The decline in Bitcoin liquidity supply comes as the world’s largest digital asset by market capitalization fell 0.6% over the past 24 hours. Bitcoin was trading at $42,235 at 11 a.m. ET, according to The Block’s pricing page.
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