It has been a year of trends for the leading cryptocurrency Bitcoin [BTC] and one among the foremost well-documented ones is the trend of more Bitcoin leaving exchanges than entering it. Since the beginning of the year, more specifically since March, over 92k BTC has left out of exchanges.
A recent report had suggested that some amount of Bitcoin were beginning to come back into the exchanges but recent data from Glassnode suggested that the Bitcoin balance on platforms was still stable.
According to the Glassnode’s tweet, Bitcoin’s present price explosion didn’t have a big effect in terms of large-scale deposits of funds into exchanges. It added,
“So far, the Bitcoin balance on exchanges remains stable – at around 14.5% of the circulating BTC supply.”
Recent reports also cited that Bitcoin reached an 18-monthly low in terms of BTC balances on exchanges and recently, Shapeshift exchange released its self-custody application, where the users don’t need to share their private keys with any 3rd party domain.
However, things is presumably to undergo a trend reversal over subsequent few months.
Sentiment Of Distrust Attached To Exchange
Although there wasn’t any clear cut reason, many suggested that a sentiment of distrust attached to exchanges ran like wildfire after the March Crash. Binance as well as Coinbase incurred less exiting Bitcoins but other exchanges faced major wrath, especially BitMEX.
However, it’s important to recollect that Bitcoin alongside the larger financial market was facing an economic collapse amidst the pandemic. With global lockdown a reality, many speculated that it had been safer to keep Bitcoin [BTC] under self-custody instead of with exchanges.
With the financial ecosystem improving, it’s possible that users saw the advantage of storing Bitcoins in exchanges again.
With BitMEX’s Open-Interest improving over the past week, the leading derivatives platform image was recovering also, that meant that users were able to let go of the past.
Therefore, it looks like a matter of time before Bitcoins are swarming back to the exchanges, with the overall sentiment becoming strongly positive over the past month.