Coinspeaker
Bitcoin Sees Daily Historic Withdrawals of $2.3B on Exchanges
Bitcoin (BTC), the world’s leading digital currency, witnessed a remarkable exodus from crypto exchanges recently, with daily withdrawals hitting an unprecedented $2.3 billion on Friday. This withdrawal surge comes amidst a backdrop of intense price action as Bitcoin strives to reach All-Time Highs (ATH).
Implications of Depleting Exchange Reserves
The depletion of BTC reserves on major exchange platforms is a noteworthy development, as it represents a change in the behavior of the cryptocurrency. This depletion is a bullish one for the coin. James Van Straten, Lead Analyst at CryptoSlate, brought attention to this phenomenon in a recent post on X.
He highlighted the staggering multi-dollar BTC withdrawals and emphasized that such a movement of Bitcoin from exchanges is a rare occurrence. “I don’t think I’ve quite seen anything like this before,” remarked Straten.
The data presented by Van Straten indicates that the withdrawal marked one of the largest recorded in over five years. Notably, approximately $200 million of the $2.3 billion found its way to Coinbase Prime, leaving a substantial $2 billion moved elsewhere.
Binance, one of the leading crypto exchanges, saw approximately $400 million in outflows, indicating substantial movement of funds over the past few days. What makes Binance’s outflows particularly intriguing is that they are unrelated to the United States spot Bitcoin Exchange-Traded Funds (ETFs), suggesting alternative reasons driving the withdrawal trend.
On March 1 alone, withdrawals amounted to around $2 billion, according to Glassnode, a prominent on-chain analytics firm. This mass exodus of Bitcoin from exchanges indicates a shift in the market, with mainstream investors seemingly still on the sidelines while exchanges experience unprecedented drains on their BTC reserves.
Furthermore, Glassnode data reveals that the total BTC assets available on major trading platforms have dwindled to 2,286,347 BTC ($142.5 billion) as of March 2, marking the lowest level since March 2018 when BTC/USD traded at just $8,000.
Inflows from New Investors Accelerate
It is worth noting that this decline in available BTC reserves coincides with its surge in price. This scenario highlights a growing preference among investors to hold their assets in private wallets rather than on exchanges. Despite this decrease in available BTC, the market composition is changing, with new entities entering the space.
Also, there is a noticeable change in the composition of the crypto market. Analysis from Crypto Dan, a contributor to the on-chain analytics platform CryptoQuant, reveals changes in the age of Unspent Transaction Outputs (UTXOs). More recently acquired coins, termed “younger” UTXOs, are becoming prevalent, while dormant coins, inactive for six months or more, are being revived.
As of the time of writing, Bitcoin is trading at $65,540, reflecting a 5.5% increase in the past 24 hours, with a market capitalization of more than $1.2 trillion. This price stability, despite record withdrawals, demonstrates Bitcoin’s rising confidence and adoption as a store of value and investment asset.
Bitcoin Sees Daily Historic Withdrawals of $2.3B on Exchanges
