Bitcoin Exodus: The Shift to Long-Term Holding

Exchange netflows, which track the movement of Bitcoin into and out of exchanges, offer valuable insights into investor sentiment. Crypto analysts have observed a steady outflow of Bitcoin, suggesting a tightening supply that could create favorable conditions for price growth.

Bitcoin Continues to Exit Exchanges 

Crypto data analytics firm CryptoQuant has observed significant negative Bitcoin netflows, indicating large withdrawals of the leading cryptocurrency from exchanges into long-term storage wallets.

According to their data, more than 72,947 BTC have left trading platforms since October 20, when a massive 37,698 BTC withdrawal was recorded. At today’s price of $97.9K per Bitcoin, this amounts to over $7.2 billion.

On November 6, just before the crypto rally began, over 14,644 Bitcoins were withdrawn from exchanges.

More Bitcoins are withdrawn than deposited on exchanges. Source: CryptoQuant

Exchange Inflows Remain Minimal

In contrast, exchange inflows have been much smaller. Over the same period, only slightly more than 22,342 BTC, or over $2.2 billion at today’s price, have been transferred to exchanges.

“The chart shows Bitcoin’s price has risen to $98.9K in recent weeks, driven not just by speculation but by the shrinking supply of Bitcoin on exchanges. The steady recovery seen in November reflects sustained demand and less selling pressure,” said CryptoQuant’s analyst.

The day after Bitcoin reached its historic $100K milestone, CryptoQuant reported that exchange reserves now hold around 2.45 million Bitcoins.

Where Are Bitcoins Going?

As Bitcoin supply on exchanges decreases, crypto whales are seizing every opportunity. During the December 5 flash crash, which saw over $800 million in crypto market liquidations, major players once again bolstered their holdings with newly acquired Bitcoin.

Both BlackRock and Bitcoin mining giant Marathon Digital purchased nearly 9,173 Bitcoins as prices dropped. 

BlackRock added 7,750 Bitcoins to its holdings, now totaling over $50 billion, while Marathon Digital bought 1,423 Bitcoins ($139.5 million), increasing its total to 22,108 Bitcoins, valued at around $2.17 billion.

Currently, publicly traded companies collectively hold 527,026 Bitcoin, representing about 2.66% of the total supply.

On the Flipside:

• Fewer Bitcoins on exchanges means less supply for new buyers, which could limit short-term price increases and create more volatility.
• Larger institutional investors hold more influence, making it harder for smaller retail investors to participate in price moves.

Why This Matters

Bitcoin leaving exchanges signals strong long-term confidence from investors, potentially driving prices higher due to reduced supply. However, the growing control by large investors raises concerns about market manipulation and price swings in low liquidity periods.

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