Bitcoin Balance on Exchanges Reducing

[notblox1]

One indicator is telling me that Bitcoin is preparing for a new major bull run and we are still early.

If we look statistics from 2010 number of Bitcoins sent to exchanges was mostly growing up until February 2020, with few breaks in 2017 and 2018.

Since February 2020 we can see clear reducing number of Bitcoins from Exchanges, and withdrawing to personal wallets.

This is good for many reasons, but most important is that people are in control of their bitcoins.

Bitcoin on exchanges from 2010 - 2020

https://glassnode.com/

Bitcoin on exchanges from October 2019 - October 2020

https://glassnode.com/

[1715072075]

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[1715072075]

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[avikz]

I am not sure about the accuracy of the data you have gathered but if I consider them as correct, I can assume people are more willing to HODL than trading or selling off their bitcoin. Which is not a great trend apparently because more bitcoin in exchanges means more trading activity and more liquidity.

So less bitcoins in exchanges will mean more bitcoins will be locked in personal wallets without moving into the market. Which literally means less liquidity flow into the market.

But bitcoin market is not a traditional market. So not sure how the market will react on this.

[Coyster]

If the statistics given is accurate, do you opine that due to fewer Bitcoin users withdrawing their funds through exchanges, Bitcoin is on a bull run? The Bitcoin market reacts in many ways and this info may actually not mean an appreciation in price leading to a bull run for Bitcoin, it could actually mean the opposite, but we'll see the direction the BTC market takes in few months to come, I prolly think the halving of few months ago is a better indicator of a bull run.

That being said, mind you that exchanges aren't the only means of exchanging Bitcoin, it could also be that more people now exchange their Bitcoins via P2p trade and not on exchanges, and hence withdrawals are still happening.

[so98nn]

I am not sure about the accuracy of the data you have gathered but if I consider them as correct, I can assume people are more willing to HODL than trading or selling off their bitcoin. Which is not a great trend apparently because more bitcoin in exchanges means more trading activity and more liquidity.

Yeah but holding doesn’t give clear idea regarding reduction in the crypto exchanges volume. I mean what’s the relation here? I believe holding would actually make this reduction very slow process. It will actually make those graphs very stable rather than going down.

So less bitcoins in exchanges will mean more bitcoins will be locked in personal wallets without moving into the market. Which literally means less liquidity flow into the market.

Exactly this is the point I am making here. The market won’t actually move really. It would only go down if there is huge dump in the bitcoin capital.

But bitcoin market is not a traditional market. So not sure how the market will react on this.

Whether it is traditional or real but however logically current market is growing a lot. More and more investors are coming into crypto space. That only states one thing, it shall be moving up.

[wildan88]

may i know the reason why holding or transferring bitcoins to personal wallet is a good reason? does it have any good effect to the current price of the bitcoin? i think if many people would hold their coins there would be a low trading volume in the market and this will result on slow change on the market and maybe slow progression of the bitcoin's price.

[traderethereum]

I agree with the OP that bitcoin is now preparing for the new bull run, and maybe the time will be happening this year or next year.
But we don't know the truth when the bull run will happen. We could only hope for that.
Maybe when the price can break $15k or up to $19k, we will see the bitcoin amount transfer to the exchange wallet.
But right now, I guess bitcoin price is on a good track to increasing the price, although we can see it will be up and down before the bull run happens.

may i know the reason why holding or transferring bitcoins to personal wallet is a good reason? does it have any good effect to the current price of the bitcoin? i think if many people would hold their coins there would be a low trading volume in the market and this will result on slow change on the market and maybe slow progression of the bitcoin's price.

I think that is because it will safer to holding bitcoin to personal wallets if we do not want to sell bitcoin right away.
Besides that, we can prevent the stealing that can happen at the exchanges too.
It affects or not, but for the bitcoin owner, they don't have to risk their bitcoin from the hacking, and they will only transfer their bitcoin to the exchanges if the price increase to their target price.
Many people will still trade their bitcoin as they want to increase the bitcoin amount, but they hold a big part of the bitcoin amount in their personal wallet for safety reasons.
Sooner or later, the bitcoin number at the exchange will slowly increase as people will know when their time to transfer the bitcoin to the exchanges.
The important thing here is we can make more bitcoin from trading before the bull run happen.

[Yatsan]

What could certainly be the significant relationships of people are now tending to withdraw their Bitcoins from exchanges and barely just wanted to store it into their personal wallets will make an assurance that Bitcoin will get into another major bull run? How could it possibly be a good reasoning that since people are out of withdrawing their Bitcoins from certain exchanges would lead or contribute to the bull run you were saying?

may i know the reason why holding or transferring bitcoins to personal wallet is a good reason? does it have any good effect to the current price of the bitcoin? i think if many people would hold their coins there would be a low trading volume in the market and this will result on slow change on the market and maybe slow progression of the bitcoin's price.

This would exactly be the point. People storing their Bitcoins on their personal wallets instead of doing trades will lead to the price of it to be stagnant or might cause into a mere down fall (it depends if it will be a soft dump or might be massive one) since people are prohibiting themselves to do trades meaning the circulating volume would also be reduced. Yes it is good that people are storing their Bitcoins on personal wallets instead of exchanges for exchanges must not be treated as storage wallets. But if people would just tend to hold their Bitcoins in their personal wallets, slow progression would be the effect of it on the Bitcoin price in the crypto market.

[exstasie]

Bullish.

It's probably worth noting though that the Bitmex margin cascade in March and the criminal charges being filed against them this month probably exacerbated this trend. There has been a big exodus from Bitmex this year, which has created a vacuum in the BTC derivatives space. When that vacuum starts filling again and new contenders establish bigger market share, we may see coins flowing back to exchanges once again.

[carlfebz2]

One indicator is telling me that Bitcoin is preparing for a new major bull run and we are still early.

If we look statistics from 2010 number of Bitcoins sent to exchanges was mostly growing up until February 2020, with few breaks in 2017 and 2018.

Since February 2020 we can see clear reducing number of Bitcoins from Exchanges, and withdrawing to personal wallets.

This is good for many reasons, but most important is that people are in control of their bitcoins.

It isnt really losing its balance but this mean that people are really that becoming smart on not to put up all of their coins on an exchange.Yeah it can really give out those less numbers but actually
those people who do held much is just waiting for the right time to step in.Pretty much sure that there are lots which had already been allocated in any possible market movement that we do saw.

We shouldnt stress out ourselves if its becomes less as year goes by because it doesnt mean that it do shows less interest or reverse adoption.People are just really wise enough because
we know that these platforms are honeyspots to be targetted out by hackers and people had really just learnt their lesson.

Adoption doesnt only show on how much volume does an exchange have or the coins that been held up.

[logfiles]

Being 2020, another factor could be because of the recent DeFi hype. It's said that a good amount of bitcoins got tokenized on the Ethereum network and got locked up. This can affect the amount of bitcoins kept in exchanges as some people are looking to make quick profits from DeFi projects,

Around 133,405 BTC ($1,557,885,255) as of today according to btconethereum.com has been tokenized on Ethereum network. 130k BTC may seem little compared to bitcoins circulating supply but when we look at the actual number of Bitcoins that are actively traded and transferred daily between exchanges, then the amount starts to look significant


Source: https://btconethereum.com

[notblox1]

may i know the reason why holding or transferring bitcoins to personal wallet is a good reason?

Because Bitcoin you keep on exchanges is not your bitcoin, and exchange is holding private key and not you.

It's probably worth noting though that the Bitmex margin cascade in March and the criminal charges being filed against them this month probably exacerbated this trend.

It is true, lot of Bitcoins is withdrawn from Bitmex, and we should also mention recent hacks including Kucoin and other exchanges exchange.

Being 2020, another factor could be because of the recent DeFi hype. It's said that a good amount of bitcoins got tokenized on the Ethereum network and got locked up.

It could be partially, but I don't consider that to be bitcoin anymore, as that smart contracts are full of bugs and they can break at anytime, if they want to risk it let them do it. Trading on dex however was much higher than before for sure.

[AmoreJaz]

If the statistics given is accurate, do you opine that due to fewer Bitcoin users withdrawing their funds through exchanges, Bitcoin is on a bull run? The Bitcoin market reacts in many ways and this info may actually not mean an appreciation in price leading to a bull run for Bitcoin, it could actually mean the opposite, but we'll see the direction the BTC market takes in few months to come, I prolly think the halving of few months ago is a better indicator of a bull run.

That being said, mind you that exchanges aren't the only means of exchanging Bitcoin, it could also be that more people now exchange their Bitcoins via P2p trade and not on exchanges, and hence withdrawals are still happening.

or because crypto users already learned their lessons not to store their btc or funds in those exchanges. as there were so many hacking incidents, even top exchanges, they finally decide not to store their funds in exchanges and just hodl it in their own wallets. just what others already mentioned and im more inclined on this reasoning.
p2p trading is i think still not huge amount to have impact in charts. imho.
 we are always seeing this very simple of advice - dont store your funds in exchanges. and hearing/reading many times over. store in wallets where you have your own keys. so maybe majority of crypto users are securing now their btc in their own wallets, finally learning their lessons!

[tabas]

Bulls as it is. If the data were verified and accurate, we can have a conclusion that no one's going to sell no matter what.
Pandemic? everyone held.
Bears? everyone still held.
Now if we get to see these signs just as what happened just now, it's encouraging to buy more and hold your horses.

[Darker45]

Well, it doesn't automatically follow that since people are not anymore keeping their Bitcoins in exchange wallets they are already in control of their Bitcoins. It may happen that they just moved them from exchanges into custodial wallets, may it be mobile or web or desktop.

I agree that this is good for many reasons, chief of which is about security. It is less secure keeping one's Bitcoin in exchanges. History is telling us so.

This could also mean people are shifting from trading into pure hodling. A lot might have realized that trading is no good anymore, that it becomes harder each day trying to catch the next direction cryptocurrencies would take.

[traderethereum]

Bulls as it is. If the data were verified and accurate, we can have a conclusion that no one's going to sell no matter what.
Pandemic? everyone held.
Bears? everyone still held.
Now if we get to see these signs just as what happened just now, it's encouraging to buy more and hold your horses.

But if everyone, including the whales, held their bitcoin, we will see the bitcoin amount in the exchanges will reduce a lot, and people will not have a passion for trading bitcoin.
The crypto market will not go to rise as we see now, but the crypto market will be at a low price without we can predict when it will increase except if the pandemic really ends.

The pandemic makes people out there lost their jobs and even lost their lives.
But for people who already know the crypto and know that crypto can be their source to make money, they will still try to use it to earn money.
We are still at the bears, but my feeling is we almost see the bears will be gone from the market because the price can increase and break the $11k level.
That can give us hope to buy more bitcoin and hold it while waiting for the next high price.

[exstasie]

Well, it doesn't automatically follow that since people are not anymore keeping their Bitcoins in exchange wallets they are already in control of their Bitcoins. It may happen that they just moved them from exchanges into custodial wallets, may it be mobile or web or desktop.

The notable thing here isn't really about security (custodial vs. non-custodial). It's the fact that there are less and less BTC deposited on exchanges = less available supply to keep prices down. That's a bullish factor.

This could also mean people are shifting from trading into pure hodling.

Bingo. I see BTC being accumulated and withdrawn from exchanges. That's what happens during bull markets. The ask side gets thin and price eventually floats upwards.

[romero121]

This chart indicates the rise in the number of people giving priority to bitcoin as an investment for long term than keeping it idle on exchange wallets. Maybe the increase in number of hacks on the exchanges also a reason for the large volume of funds getting moved to personal wallets from exchanges.

However with time the volume of funds in exchanges will have variation with regards to the price fluctuations. This also will have a variation on the data sheet.

[jseverson]

It might also be due to DeFi, interestingly enough:

The latest bitcoin balance drop on exchanges started in mid-March when prices took a steep tumble to a 10-month low, according to Norwegian crypto analysis firm Arcane Research’s weekly report on Sept. 22.

Arcane Research attributed the decreased bitcoin balance on exchanges partly to the white-hot decentralized finance (DeFi) sector, where bitcoin is being tokenized on Ethereum by those lending the cryptocurrency in exchange for yields.

“In the same period [since March 15, 2020], more than 100,000 BTC have found their way into Ethereum protocols, which could explain some of the outflow,” the research team wrote.

On top of that, we're seeing institutions like Grayscale hoard Bitcoin in full swing real time. The last time Bitcoin exchanges were this low was November 2018 according to the article above, which was a bearish preiod, but all signs right now definitely point to bulls. We're currently in a very interesting period where we're seeing actual growth not based on external hype.

[samcrypto]

The supply is not reducing at all, rather its scattered and it doesn't mean that the holders are burning their Bitcoin because if they sold it someone will buy it.
Exchanges are growing not just for bitcoin but for so many altcoins project so I believe some of them just trading their bitcoin so they can have the good tokens on their hand.

Besides, people are having a trust issues with the exchanges and maybe its safer for them to liquidate it and transfer it to their own wallet which they control. The bull market is coming, they are also preparing for that and they want to become a safe hodler.

[shield132]

The most curious thing is that exchanges suggest people to keep their bitcoin here instead of own wallets because they are more secure and safe but the hilarious is that after stating such proposal by the CEO of Binance, this exchange was hacked after 1-2 months if I amn't mistaken.
It's good that people prefer to keep their bitcoins in their own wallet instead of exchanges. I think this behavior can be a signal that people are expecting bitcoin's price to rise and want to keep their funds more secure right now. Maybe this opinion is illogical but personally I find some logic in it. When something is valuable or you think will become valuable, then you take care of it more seriously.