Bitcoin Supply on Exchanges Hit Lowest Point Since 2017: What’s Going On?
• Bitcoin supply on exchanges is at its lowest since 2017 bull market peak.
• This has been happening consistently since March 2020, when crypto bottomed ahead of the pandemic rally.
• Bitcoins leaving exchanges in recent months may be due to security and transparency concerns raised by the FTX collapse.
Bitcoin Supply At Lowest Since 2017 Bull Market Peak
The balance of Bitcoins on exchanges has recently dropped to 2.27 million, the lowest it has been since March 2018. This means that 11.8% of the entire Bitcoin supply is currently held on exchanges – a figure not seen since December 2017, when Bitcoin reached its all-time high of $20,000 before entering a long bear market.
Falling Supply Since 2020 Crypto Bottom
Cryptocurrency owners have been pulling coins off exchanges since March 2020, when prices bottomed out ahead of an explosive pandemic bull run. Initially, this was done so participants could enjoy the vibrant ecosystem and activity around crypto markets; however, even after volumes and interest have fallen again recently, coin holders are still withdrawing their funds from exchanges – though for different reasons.
Security Concerns After Exchange Collapse
It appears people are now motivated to take their coins off exchange due to rising concerns about security and transparency in cryptocurrency markets – particularly after one major exchange (FTX) collapsed last year with customers‘ assets being gambled away secretly. As such, many holders are heeding the old saying „not your keys not your coins“ by taking control over their own funds once more.
Moving Coins for Yield
While some people may be concerned about safety and holding onto their funds themselves, others are moving coin off-exchange for other reasons such as yield farming or staking activities available outside traditional trading platforms which offer better returns than those found on exchanges.
The fact that 11.8% of the total Bitcoin supply is held on exchanges marks a new low in terms of how much cryptocurrency is being kept there – a trend which started at the start of 2020 but has been driven further by recent events such as FTX’s collapse and subsequent loss of customer assets raising questions about security and transparency across cryptocurrency markets as a whole