Crypto exchanges have experienced a massive outflow of BTF from their coffers, showing a supply flow shift. According to data from Glassnode, more than $10 billion worth of BTC has left major exchanges. Most of the movement has been attributed to the emergence of spot Bitcoin ETFs in the US. The data also indicates that exchanges have seen their BTC holdings decline to 136,000 Bitcoins since January 11.
Bitcoin outflows on exchanges hit $10 billion
Since the introduction of spot Bitcoin ETFs in the US, there has been a significant increase in BTC withdrawals made on major platforms. In context, over $9.5 billion worth of BTC has been withdrawn from these exchanges in the three months that the ETFs have traded. According to a report by Coinbase, BTC balance was down to about 2,320,458 on exchanges on March 28. This is the first time that the balance has dropped to this figure, which was last seen in April 2008.
According to the data, there have been no signs that the trend will stop as daily outflows of BTC were $1.5 billion on March 27. In an analysis made by a contributor on CryptoQuant J.A. Maartunn, a large transfer of USDC was recently made to renowned crypto exchange Coinbase. In his analysis, he noted that the transfer was the largest ever inbound transfer in the history of the crypto market. This has raised speculation about a strong buying pressure coming.
Implications of ETF on Bitcoin’s price dynamics
Market participants have been debating the long-term effects of Bitcoin ETFs on the price and supply of BTC. According to many analysts, there might be an incoming supply squeeze which will see supply reduce drastically and demand surpass the available BTC for sale. A standing prediction that this could happen in the next six to twelve months has also been discussed. The increase in traders buying ETFs shows that there is a strong buying appetite compared to the amount of Bitcoin being produced by miners.
With the upcoming BTC halving event scheduled to take place next month, the issue is expected to continue as BTC supply will undergo a cut to 3.125 BYC per mined block. Founder of Capriole Investments Charles Edwards discussed the effect of the upcoming halving event on the market. According to Edwards, when the halving event takes place, BTC will become scarcer than gold.
The mixture of institutional demand for ETFs, supply cuts through halving and Bitcoin’s pedigree as one of the hardest assets will offer an optimistic outlook for April and the rest of the year. The ever-changing dynamics of Bitcoin’s supply and ETF adoption present a matured environment where the traditional market integrates with the digital space. The shift will reflect both confidence in the asset, the possibility for an upward price trajectory, and its adoption as a store of value.
