Bitcoin outflows as exchanges took millions of BTC out of circulation

    Tanya Sharma
    Tanya Sharma
    Published on November 18, 2022 6:49 PM

    Updated on January 10, 2023 2:20 PM

    Bitcoin's price is now hovering at $16.4k, down 3% from the previous week. The cryptocurrency's value dropped 14% in the previous month.
    Bitcoin outflows as exchanges took millions of BTC out of circulation
    Source: Unsplash

    The rise of Bitcoin and cryptocurrency exchanges over the years reflects the progress of the business. The most critical firms supporting blockchain and crypto technologies have been exchanges. Furthermore, the exchanges, which industry titans manage, contain most of the crypto ecosystem's renowned brands.

    From the early days of Bitcoin to the present, crypto exchanges have changed and expanded in various ways, garnering consumers' trust. However, things have quickly turned sour, and users have lost faith in cryptocurrency exchanges. The FTX collapse has spread its contagion throughout the crypto space, bringing down the majority of crypto exchanges.

    Following the bankruptcy of FTX, there was a significant outflow of Bitcoin from crypto exchanges this week. According to Glassnode statistics, Bitcoin is swiftly leaving exchanges. According to the study, users and investors have withdrawn all Bitcoins that have entered exchanges since 2018.

    Since FTX's insolvency, primarily due to asset mismanagement, there has been an increase in demand for self-custody and spot-driven BTC markets. This has never happened before in any of Bitcoin's previous bear markets.

    According to Santiment, stablecoins like USDC, BUSD, and USDT continued to enter the crypto market in early 2022. Furthermore, the data revealed that new investors were purchasing properties as values fell.

    The market cap of stablecoins increased to $134.07 billion, with coins entering the market at the same time BTC reached its peak. However, things have changed since the Fed raised interest rates in June.

    Binance sees 138K BTC outflow

    According to an analyst's article on CryptoQuant, Binance has received a big Bitcoin deposit.

    The relevant signal in this scenario is the "exchange reserve," which displays the total amount of BTC currently stored in the wallets of a regulated exchange.

    Source: CryptoQuant

    BTC price contagion worries are still due to FTX insolvencies and associated panic selling. Now, the recent on-chain numbers from Binance, which have witnessed the exchange's most significant daily influx on record, may give a different cause for jittery markets.