I'll add that less coins on exchanges is always good. Think of it like this:
More coins available for sale > bigger sell walls > more fiat needed to break into higher prices
Less coins > much easier and more frequent short squeezes > higher possibility of price manipulation but also higher and more frequent pumps, wider price ranges.
Again. You are looking at supply site of equation only. There is also a demand site. People are not only withdrawing bitcoin but fiats too. So there are smaller sell walls but also less money to buy them.
Less coins > much easier and more frequent short squeezes > higher possibility of price manipulation but also higher and more frequent pumps, wider price ranges.
IMO more coins outside exchanges is good because it suggest more people self custody and as a result less coins being possibly lost or stolen. It's also better for traders because they're the ones that love volatility. I'm not a trader and I don't care if the price range is wider and btc goes up and down by 100% in a year. I've seen it in 2017, 18 and 19 and was fine with it. I kind of miss it now.
But traders like volatility that is predictable. Not random flash crash that whipe out stoploss orders and leveraged positions. I remember an interview with market operator that I was watching 3-4 years ago. Guy from big found said something like that - "If you want people to buy, create nice looking chart for them that fallows all rules, supports, trend lines. Make it a good place to draw lines and do technical analysis"
IMO more coins outside exchanges is good because it suggest more people self custody and as a result less coins being possibly lost or stolen.
Thats indeed a positive thing. Another one, even more imporatant, is less coins being a collateral in fractional reserve -
https://bitcointalk.org/index.php?topic=5094088.msg49096584#msg49096584