Bitcоin

Bitcoin Supply on Exchanges Hits Lowest Level in Over Five Years

The cryptocurrency market is witnessing a significant shift in trading patterns as the amount of Bitcoin on exchanges hits its lowest ratio since December 2017, a five-and-a-half-year low that suggests there’s increased interest in self-custody among traders.

A lower supply of the flagship cryptocurrency on trading platforms reduces the amount of Bitcoin potentially at risk of being sold back on the market, effectively reducing available supply and making it easier for BTC’s price to rise if demand grows.

Cryptocurrency, and Bitcoin in particular, have always been associated with the idea of decentralization and autonomy. Self-custody, or the practice of securely storing one’s own cryptocurrency, is a key element of this principle. It ensures that traders maintain full control over their digital assets, without relying on third-party services like exchanges.

According to Coinglass, the balance of Bitcoin on all exchanges was 1.13 million BTC as of May 9, 2023, down by nearly 15% since May 7, 2023. This represents about 6% of the total supply of Bitcoin, which is currently around 18.8 million BTC. The last time the ratio was this low was in December 2017, when Bitcoin reached a high of nearly $20,000 per coin.

Data from crypto analytics platform Santiment shows that only 5.84% of the supply is being held on cryptocurrency exchanges. Data may differ between platforms due to potential changes in how exchange wallets are identified, it’s worth noting.

? The amount of #Bitcoin on exchanges is now at its lowest ratio since December, 2017. The five and a half year low is a good sign of increased interest in self custody for traders, and less potentially at risk to be sold back to exchange wallets. ? https://t.co/U3n9McxcnH pic.twitter.com/8NjZLf0k2D

— Santiment (@santimentfeed) May 8, 2023

The decline in Bitcoin supply on exchanges suggests that more users are holding their coins for the long term, rather than selling them back to exchange wallets. This could be a sign of increased confidence and interest in Bitcoin as a store of value and a hedge against inflation, especially amid the ongoing economic uncertainty and monetary stimulus.

Some users may be self-custodying their funds as after the collapse of FTX, many do not trust centralized platforms to hold their funds for them, especially if they are not actively using these platforms to trade.

As CryptoGlobe reported, former Goldman Sachs executive Raoul Pal recently offered an optimistic outlook on the trajectory of the cryptocurrency markets. He anticipates that the crypto sector will rally out of its current bearish state faster than it did in 2019, expecting considerable growth within the next half year.

Nevertheless, a Goldman Sachs survey has shown a marked decline in enthusiasm for cryptocurrencies among wealthy family office investors, in an outcome attributed to the tumultuous volatility experienced in the crypto market over the past year.

Image Credit

Featured Image via Pixabay

   

Source

Click to rate this post!
[Total: 0 Average: 0]
Показать больше

Добавить комментарий