Updated on January 9, 2023 12:50 PM
According to analytics firm Glassnode, as Bitcoin investors have progressively shifted their holdings to self-custody solutions, on-chain exchange flow data reveals a jump in withdrawals to self-custody wallets. In a tweet on November 14, Glassnode stated that Bitcoin exchange outflows had reached close to record levels of 106,000 BTC each month.
Glassnode further noted that the historic levels of Bitcoin outflow have only occurred three other times: in April 2022, in November 2020, and in June/July 2022.
Further, we have discovered that on November 9, there were around 90,000 Bitcoin wallets obtaining the assets from exchange addresses. Exchange outflows often indicate that Bitcoin is being held for the long term, which is positive. In this instance, it is the outcome of waning trust in centralized crypto exchanges.
According to Glassnode, "The failure of FTX has created a very distinct change in #Bitcoin holder behavior across all cohorts." Glassnode states these outflows have led to "positive balance changes across all wallet cohorts, from shrimp to whales."
Learn more about the FTX collapse here.
The industry's top executives are increasingly pushing for self-custody options as the mantra "not your keys, not your coins" has more significance than ever. Anthony Sassano, an Ethereum expert, stated on November 13 that cryptocurrency owners should only store their assets on centralized exchanges if they actively trade huge quantities.
It's true what they say: self-custody stops centralized third parties from misusing authority. Stablecoins, which are cryptocurrencies with prices intended to be fixed to reference assets, primarily securities or fiat currency, several of which destabilized last week, have been flooding exchanges at higher rates over the last week, according to Glassnode.
Almost all significant stablecoins lost their pegs to the US dollar during the FTX scandal, but most have gained them again as markets have stabilized. Stablecoins worth more than $1 billion arrived on controlled exchanges on November 10. A new record-high stablecoin reserve of $41.2 billion was attained across all exchanges it monitors.