NEW YORK – Recent data from CryptoQuant Pro indicates a significant behavioral shift among investors, who are increasingly moving their holdings from exchanges to self-custody wallets. This trend, which became noticeable after 2020, suggests a growing preference for holding Bitcoin overselling it. The change stands in stark contrast to the consistent rise in Bitcoin reserves on exchanges observed from 2013 to 2020.
As of today, the amount of Bitcoin held in exchange wallets totals approximately 2.04 million BTC, valued at about $73.3 billion. This figure represents over one-tenth of Bitcoin’s total circulating supply and is significantly lower by one-third from its peak in 2020. The decline in exchange-held Bitcoin points to a potential shift in market dynamics. Future bull markets may be driven by lower buyer activity, as investors’ preference for holding onto their assets could lessen the amount of Bitcoin available for purchase on exchanges.
Moreover, this trend towards self-custody also implies a decrease in custodial risk. Investors have become more cautious about where they store their digital assets following high-profile incidents like the FTX collapse. Despite the large speculative supply that historically characterized exchange reserves, Bitcoin’s price soared to record highs in 2021 amid exceptional demand, underscoring the cryptocurrency’s resilience and investor confidence even in the face of reduced exchange liquidity.
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