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Investors are withdrawing their bitcoin from crypto exchanges

Investors are withdrawing their bitcoin from crypto exchanges

The number of Bitcoin held on exchanges fell to 2.4 million BTC in June. This is the lowest level since August 2018.

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Fewer and fewer bitcoins on the exchanges

The number of bitcoins held on central exchanges has fallen to its lowest level since 2018, according to data from Glassnode. Following the recent problems with Celsius and Babel Finance, users may withdraw their coins for fear that the respective crypto exchange will rust.

Notice

The chart below shows a sharp drop in BTC on exchanges on June 13th. Celsius has announced that it will suspend withdrawals.


BTC Exchanges, Source: Glassnode

Why is Bitcoin leaving the exchanges?

The amount of BTC on exchanges exceeded the 2.4 million BTC mark in 2018 and never fell below that milestone until June of this year. It peaked at 3.1 million BTC in May 2020 and has been declining ever since.

To date, the withdrawal of cryptocurrencies from exchanges has been considered a positive indicator. Background: Decreasing an asset ‘s inventory on exchanges decreases liquidity and the ability to trade it – and so the risk of sale.

For example, many believe that Bitcoin’s outflow is booming that investors transfer coins to a cold wallet for long-term hoarding.

“It’s not your keys …”

Noting concerns about certain exchanges, crypto YouTuber Guy from Coinbureau recently declared:

“It is now more important than ever to emphasize the importance of * self-preservation *. Tell me: it’s not your keys …

You cannot * verify * the current solvency of all of these CeFi lenders. Holding funds with them is based on trust. But crypto is supposed to be * trustless *. You have no guarantees, you have to keep your own coins. ”

The topic was also widely discussed in a recent Twitter space between CryptoSlate, EAM Crypto and Defi Yield App. Enrique of EAM Crypto questioned the unsustainable nature of centralized exchanges, arguing that the fall of Terra could have consequences for other companies.

Brad Mills, host of MIM Podcast, recently spoke about the Mt.Gox disaster mind and comments:

“I learned from the MtGox crash: ‘Not your keys, not your coins’ and ‘Don’t trust, verify’. I’m still here.

They’re coming soon, this bear market is a reset. “

Investors in Celsius can too they do not have access to their funds for more than two weeks after the disbursement break. Holding bitcoin in a wallet gives the investor complete independence of wealth, and depositing cryptocurrencies on an exchange is similar to depositing with a bank – though not government protection.

With bitcoin inventory on exchanges below 2.4 million BTC and over 30 million crypto investors using Binance alone, increases in asset shortages. If Bitcoin Demand continues to rise and exchange holdings decline, this could create a strong fix for upward movement in price.

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Text credit: Cryptoslate

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