• Bitcoin supply on exchanges is at its lowest since the 2017 bull market, with 11.8% of the total supply currently held there.
• This trend has been consistent since March 2020, when crypto bottomed ahead of a rally due to the pandemic.
• The movement of coins off exchanges could be attributed to security concerns after FTX collapsed, as well as people withdrawing coins to participate in crypto activities and yield opportunities.
Bitcoin Supply on Exchanges Falls to Lowest Level Since 2017
The balance of bitcoins on exchanges is now down to 2.27 million – that is the lowest mark since March 2018, with 11.8% of the total Bitcoin supply currently held there, representing the lowest mark since December 2017.
Reason for Decrease in Exchange Balance
The decrease in Bitcoin balance on exchanges may have multiple causes; originally people pulled Bitcoin from exchanges to participate in vibrant crypto ecosystem with high volumes and activity and much scope for yield however, recent withdrawals may be attributed to fears over security and transparency heightened after FTX collapsed.
Pandemic Bull Run
Crypto fans will remember December 2017 as the month that Bitcoin went absolutely bananas, breaching $20,000 for the first time; it marked the top however with Bitcoin at $7,500 seven weeks later and not far above $3,000 within a year. It was a long bear market until COVID hit in 2020 sparking a pandemic bull run which saw fortunes turning around once again.
„Not Your Keys Not Your Coins“
This phrase highlights why people choose take their funds off exchange and store them themselves in wallets or other secure locations; so they are able retain full control over their assets rather than leaving them vulnerable by storing them in an exchange wallet controlled by third-parties who have access to user funds and private keys – something made abundantly clear after FTX collapse exposed its customers‘ vulnerabilities when it came to asset security .