This declining trend in Bitcoin and Ethereum reserves on centralized exchanges reflects a growing inclination towards non-custodial solutions.
The reserves of Bitcoin on exchanges hit its lowest level in five years, with a total of US$5.96 billion withdrawn in the last month.
The information comes from a report by cryptoquant.com, which claims that centralized exchange platforms have seen a reduction in the amount of Bitcoin available, falling to levels not seen since November 19, 2018. Since the beginning of June 2022, The amount of Bitcoin on these platforms has shown a steady downward trend.
According to the document, as of July 11, 2024, 99,308 BTC, equivalent to $5.96 billion, has been withdrawn from exchanges. Currently, data from cryptoquant.com indicates that centralized exchanges hold 2,679,880 BTC, worth approximately $161 billion, based on Bitcoin rates as of August 12. The last time Bitcoin reserves were this low It was during the bear market in November 2018.
Bitcoin: What is happening with the stock on the exchanges?
Since then, the stock of Bitcoin on exchanges has increased to an all-time high of 3,374,491 BTC on July 23, 2021. However, this figure gradually began to decline, reaching 3,356,772 BTC on June 6, 2022. The collapses of Terra and FTX led to a 20.2% decrease in the amount of Bitcoin on exchanges, which now stands at 2.67 million BTC.
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Additionally, Ethereum (ETH) reserves have also dropped to historic lows. Currently, 16.8 million ETH is held on exchanges, a significant reduction from the $35.44 million ETH recorded on June 4, 2020. Since September 15, 2022, 11.44 million ETH has been withdrawn from exchanges, representing a value of approximately $29.97 billion at current ether rates.
This declining trend in Bitcoin and Ethereum reserves on centralized exchanges reflects a growing inclination towards non-custodial solutions, which is positive for both the security and scarcity of these assets.
With an increased preference for self-custody, crypto assets like Bitcoin are becoming less liquid on exchangeswhich can increase its scarcity and potentially strengthen its value over time, benefiting long-term investors and underscoring the importance of self-custody and decentralized finance (DeFi).
Source: Ambito
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