Over the past month, starting from July 11, 2024, from centralized cryptocurrency exchanges (CEX) brought out nearly $6 billion in bitcoin, or 99,308 coins, according to Bitcoin.com, which cites analytics firm CryptoQuant. The remaining bitcoins held on CEX total 2.68 million BTC ($161 billion), the lowest since November 2018, writes RBC Crypto.
The trend of declining Bitcoin reserves on exchanges has been observed since mid-2022. This coincided with the collapse of the FTX exchange, which, according to Bitcoin.com, highlights the growing interest of investors in non-custodial options for storing the main cryptocurrency.
FTX is to blame
The FTX collapse was one of the largest scams in cryptocurrency. Sam Bankman-Fried, who founded the company, was sentenced to 25 years in prison and fined $11 billion. He had previously been found guilty of fraud, conspiracy, and money laundering.
Before the FTX collapse, there were about 3.37 million BTC (over $200 billion) stored on exchanges, which as of August 12 means that about 20% of all bitcoins stored in mid-2022 have been withdrawn from exchanges.
The situation may indicate that more users are prioritizing self-storage. And crypto assets like Bitcoin are becoming less liquid on exchanges, increasing their scarcity and potentially strengthening their value over time, benefiting long-term holders.
How much bitcoin is stored on exchanges
The largest in terms of the number of bitcoins stored is the American cryptocurrency exchange Coinbase. As of August 12, it holds at their addresses more than 840 thousand BTC ($50 billion), according to Coinglass.
Coinbase is followed by Binance, which has more than 626 thousand BTC ($37.4 billion) on its balance sheet. Third place in terms of the amount of the main cryptocurrency on its balance sheet is taken by Bitfinex, which has more than 401 thousand BTC ($24 billion) on its accounts.
Data on bitcoin reserves on exchanges is taken from official sources, as well as using on-chain analytics methods. The most well-known crypto companies specializing in analyzing such data include Glassnode, Santiment, and CryptoQuant.
Researchers have begun using on-chain to monitor users’ transaction behavior, predict prices, and cross-reference data from other sources for deeper analytics. This type of analysis is often used by law enforcement and analytics companies to combat financial and other crimes.
Fourth place in terms of reserves was shared by the American crypto exchange Gemini, Canadian Kraken and OKX – the combined reserves of these companies amount to about 380 thousand BTC ($22.7 billion).
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Source: Cryptocurrency
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