15M BTC goes into self custody

[Little Mouse]

Is everyone beginning to understand Not your Keys, Not your coins , or is it temporary because of FTX?

I think it's mostly the FTX tragedy, not something like people have learned about NYKNYC. However, a little percentage of people have learned what is a custodial wallet and we should avoid them. In one of my Facebook groups regarding bitcoin, people started to look for non-custodial wallets but before the FTX issue, they never bother to learn even despite my continuing awareness article on such issues. However, this is not the first time. There was mtgox exchange that had almost the same issue. Who has learned? Not more people than who have been the victim.

[1715486245]

1715486245

[kryptqnick]

I hope the FTX story will have a long-term impact, as people are currently withdrawing their funds from centralized platforms and will get used to storing them in non-custodial wallets, so in the future there won't be any need to move back to centralized platforms. Hopefully, people becoming more mindful of the storage and less trusting when it comes to exchanges will also force exchanges to review their policies and suggest better conditions to their users (for example, a guarantee that the exchange does not use the money of customers for any purposes and earns profits in other ways).

[so98nn]

Finally something of good news after long time. If Satoshi is out there then he might be happy about it considering peeps are actually going back to normal methodology of using bitcoin. All custodial wallets and p2p preference of transacting. This is what was needed during this period and also as we know that recession is at our doorstep it’s better that bitcoin goes all dormant and trades stop for a while. This is just to relax the community who love to see bitcoin in dollar value all the time. Thanks to FTX lesson. It did good.

[Baofeng]

Yeah, probably an offshoot on what had happened to FTX and that is why many investors are withdrawing right now and doing self custody. But we don't know how long this will take though, maybe again because of this event and once it is forgotten in the next couple of months, everyone is going back to it's norm. Depositing huge amount of bitcoin in exchange for whatever purposes they have, trading, etc.

So this is not yet final in my opinion, we need to go back and see the data maybe in the beginning of the 2nd quarter next year to see if everything has settled down a bit.

[bishopcrypto]

Yeah, probably an offshoot on what had happened to FTX and that is why many investors are withdrawing right now and doing self custody. But we don't know how long this will take though, maybe again because of this event and once it is forgotten in the next couple of months, everyone is going back to it's norm. Depositing huge amount of bitcoin in exchange for whatever purposes they have, trading, etc.

So this is not yet final in my opinion, we need to go back and see the data maybe in the beginning of the 2nd quarter next year to see if everything has settled down a bit.

What's amazing is, in the past people just sold to USD and left the market. Now they're holding their btc instead - too precious to them to dump. Underrated paradigm shift imo.

[hopenotlate]

Yeah, probably an offshoot on what had happened to FTX and that is why many investors are withdrawing right now and doing self custody. But we don't know how long this will take though, maybe again because of this event and once it is forgotten in the next couple of months, everyone is going back to it's norm. Depositing huge amount of bitcoin in exchange for whatever purposes they have, trading, etc.

So this is not yet final in my opinion, we need to go back and see the data maybe in the beginning of the 2nd quarter next year to see if everything has settled down a bit.

Definitely agree with you on this, people tend to forget too early what happened in the past and also greediness plays an important role in this kind of decisions : some really tempitng offers by some reputalbe exchanges ( applies to protocols as well) like two digits interests on stablecoins and a general acceptance of them as if they were normal and sustainable in the long run will do the trick again.

[Kryptowerk]

Is everyone beginning to understand Not your Keys, Not your coins , or is it temporary because of FTX?

Call me pessimistic, but I think it's just realistic to say: It's temporary. Sure, with the "funny" fuck-ups that immediately became public knowledge within FTX's company structure as well as the extreme scale of this whole thing, it gained an unseen-before media attention. When it's October 2023 and we are starting another bull-run, there may be some warnings from seasoned Bitcoin-veterans, but all-in-all especially any newcomers will again just leave their corns on exchanges until they either get burned themselves, or are lucky / smart enough to get educated.
There were so many similar (even though smaller in regards of monetary damage) incidents with exchanges almost every year before FTX... So what really is different with this one?

What's amazing is, in the past people just sold to USD and left the market. Now they're holding their btc instead - too precious to them to dump. Underrated paradigm shift imo.

That IS an interesting thought. And I think you are partly right, regarding quite a few ppl that were just semi-hodling and amateur-trading with their coins on exchanges. In the long run I am pretty sure it still needs a few more Mt. Goxes and FTXes and probably another decade for a general "not your keys - not your coins awareness".
Maybe this will not happen until some sort of basic Bitcoin education is part of the school system.

[albertorma]

It's clear that the decrease in the number of Bitcoin moving around / exchanging hands is due to a growing awareness among investors of the importance of securely storing their Bitcoin. As more people became aware of the risks associated with keeping their Bitcoin on exchanges, shitchain bridges or even in hot wallets, they are taking steps to move their funds into more secure forms of storage. This is a positive development that implies people becoming more savvy about managing their own Bitcoin and taking steps to protect It.

It's also important to remember that even though centralized exchanges play a legitimate role in the Bitcoin ecosystem, Bitcoin was never intended to be custodied by a third party. The decentralized nature of Bitcoin means that individuals are ultimately responsible for the safekeeping of their own funds, and it's crucial for people to take steps to protect their networth and retain control over their own Bitcoin.

[teosanru]

according to Glassnode on-chain data analyzed by Cryptoslate, leaving less than 22% of all mined BTC moving around and exchanging hands.

These indicators show that investors are starting to withdraw their digital assets away from the exchanges, whether using wallets or other methods.
Indices measure the movement of currencies as a function of whether the transaction is in cold storage or in a hot wallet.

Think of illiquidity as the point when Bitcoin moves to a wallet that shows no spending history, while liquidity is when BTC moves to wallets that have a history of spending such as hot wallets and exchanges.

The chart above demonstrates the amount of highly liquid and liquid BTC assets and shows the figures are currently 3 million and 1.3 million coins respectively. The data is clear that both liquid and highly liquid supply have been trending downwards amidst the current market turmoil

Source: https://cryptoslate.com/research-2nd-december-the-15m-bitcoin-just-went-into-self-custody/


Is everyone beginning to understand Not your Keys, Not your coins , or is it temporary because of FTX?

Excellent infographics and I think these really actually depict what you are saying. This seriously means that people are taking things seriously and they are doing what actually they should have done from very start. Moreover obviously with the world's second biggest exchange going bankrupt like this it's obvious your trust on such systems goes very down. But yes you are eight it can be temporary as well because people really forget these things in long term when they see ease.

[Husires]

Update:
Around 200k Bitcoin flowing out of exchanges last 30-days worth $3.4 billion.

Source: https://www.reddit.com/r/Bitcoin/comments/ze7f90/around_200k_bitcoin_flowing_out_of_exchanges_last/

It seems that some began to learn the lesson and withdrew their currencies, as about 200k bitcoins is not considered a small amount, but for how long this memory will remain strong and they will not try to be lazy and leave their currencies in centralized platforms.

As we can see from the charts, the amount of bitcoins out of exchnages these 30 days is the largest even since 2016.
I expect people to forget all these details with the next cycle after about three years

[franky1]

update

using the "bitcoin richlist"
the top 3 categories
january 2022
[100,000 - 1,000,000)   793,314 BTC
[10,000 - 100,000)   2,262,241 BTC   
[1,000 - 10,000)   4,630,567 BTC   

december 2nd
[100,000 - 1,000,000)   672,354 BTC
[10,000 - 100,000)   2,072,651 BTC
[1,000 - 10,000)   5,177,623 BTC

december 18th
[100,000 - 1,000,000]   684,123 BTC
[10,000 - 100,000)   2,291,459 BTC
[1,000 - 10,000)   4,601,707 BTC


which is a total of
Jan:  7922628
dec 2nd: 7686122  (average 770 a day removed(jan-dec day avg))
today: 7577289 (average 6800 a day removed(dec day avg))

seems people are still pulling coins out of exchanges, and it seems to be more coins on average per day in december than the amount per day average for the year

[lizarder]

They even noticed it before the FTX crash, but they believed in the exchange so much they didn't mind it. However, as far as FTX is concerned, there are many negative issues that may make them uncomfortable keeping their assets on the exchange so they choose to withdraw their assets to their respective wallets.

If indeed the FTX case has taught us about security, then will the percentage of trust in other exchanges have any effect. To this day how many exchanges are listed and how do they provide answers regarding the level of security, while the owner of Binance once said, that the exchange is not a place for long term asset storage (if my memory serves me correctly).

But as @mk4 says, these assets will be very easy to transfer back to the exchange when their holders start to trust the exchange again as before. For a while, the situation of centralized exchanges really lost a lot of holders as most of them withdrew their assets, but it will return to normal with time.

Exchange reputation has different levels of trust. When the FTX case starts to no longer be discussed in the public sphere and it no longer makes people feel afraid, it will return to normal conditions. On the other hand, many people are starting to realize that the exchange is not a safe place to store assets, both for the long term and in large quantities.

[Welsh]

Also, while this is great news, let's not forget that people can still just easily send back coins to exchanges once things settle down.

Which is likely the case. Exchanges are a hot topic, and several news sources as well as users on the forum are talking about a domino effect, potentially happening. Probably has a lot of users spooked, and therefore they've temporarily decided to take it off of exchanges.

It'll be interesting to see what happens again after a year. A lot of these people are traders, so they'll insist on having their coins on an exchange for the fastest possible way of trading, and therefore capitialising on the market. Even though, I personally disagree with that approach.

[panganib999]

This is to be expected. The not your keys not your movement statement that proceeded FTX's collapse made grounds on the crypto space and had shed light on how little your control is when you entrust your coins to a centralized exchange no matter how trustworthy they are. I suppose another bullrun may implore these investors to use their money and bring it to their hotwallets again but that'll take time, seeing as things go we are still in recession, and it may take a while for the outside economy to recover, and incidentally crypto market itself.

[Marvelman]

I've always wondered, how do these on-chain data analysts know that coins are going into self-custodial wallets? Do they consider everything that is not related to exchanges or some other known services to be self-custodial? That doesn't necessarily have to be the case.

[panganib999]

I've always wondered, how do these on-chain data analysts know that coins are going into self-custodial wallets? Do they consider everything that is not related to exchanges or some other known services to be self-custodial? That doesn't necessarily have to be the case.

I think they have parameters set that will at least let them predict it's a self-custodial wallet. For instance there should be indicators on the address AFAIK, and the number of incoming and outgoing transactions could also be a giveaway to what type of wallet that is. I find that I have a lot of incoming transactions in my cold wallet, they could've applied the same logic here. Finally, its relevance to the current events. As said earlier this massive move happened after the collapse of FTX, so an educated guess could be made that would lead someone to think this is an upsurge of users transferring their money to cold wallets.

[KingsDen]

This is not a very great news, neither is it a news that should bother us for so long because the movement of funds in cryptocurrency has started for so long and will continue to happen in as much as the cyclical nature of Bitcoin continues to happen.
Let's keep the exchanges problem outside for now, when bitcoin goes down again to the bearest bottom and start to move towards Bull state you will understand that many people will need to move their money back to exchanges in order to buy Bitcoin.

So it does not make any difference for the movement because they will still go back to exchange. Even in this process many people will lose their funds. It will be fine that we stop creating this FUD we are creating.

[Husires]

According to this report 15 million BTCs are now held in self-custody which leaves less than 22% of all mined BTC on exchanges.

It's been a month since I wrote this thread and it seems that more and more investors still prefer to keep their currencies off the platforms.

We hope it will be a continuous trend.

[Lucius]

According to this report 15 million BTCs are now held in self-custody which leaves less than 22% of all mined BTC on exchanges.
It's been a month since I wrote this thread and it seems that more and more investors still prefer to keep their currencies off the platforms.

That doesn't seem very credible to me, because if 15 million BTC is in self-custody, all those analyzes that said that about 4 million BTC were lost, then it turns out that CEX doesn't really have anything or just dust? I know that this whole story about where are all the mined BTC and how much has been lost is mostly made up of speculation based on a not very logical methodology, but something in that story is not right and someone is obviously manipulating the data.

[Husires]

That doesn't seem very credible to me, because if 15 million BTC is in self-custody, all those analyzes that said that about 4 million BTC were lost, then it turns out that CEX doesn't really have anything or just dust?

On the contrary, the word "self-custody" refers to the possibility of accessing the private key of one individual, whether he has access to that private key or not, and therefore in this term he enters:

• Coins that have been withdrawn from CEXs.
• Coins that have been mined and not sold.
• Coins in cold storage (even CEX cold storage)
• Lost coins.

So the number is logical or is it a measure of whether the money is in the hot storage or not.

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