Bitcoin Sees Historic Drop on Exchanges, Here’s What it…
The fall of Sam Bankman-Fried’s $32 billion crypto empire highlighted the importance of self-custody for users. In fact, investors have already hopped on the trend of holding their assets themselves rather than entrusting their hard-earned money to a third-party platform.
According to the latest data compiled by crypto analytic company, Santiment, Bitcoin’s supply on centralized crypto exchanges has dropped from 11.85% to 6.65% over the past year.
📉 The overall supply of #Bitcoin on exchanges has dropped from 11.85% to 6.65% over the past year, a historic drop that illustrates the rise in interest in self custody. #Binance, #Coinbase, #Kraken, #Kucoin, and #Bitstamp all reflect this $BTC exodus. https://t.co/4GSJs29fOK pic.twitter.com/aDLuAw3oiU
— Santiment (@santimentfeed) January 18, 2023
The exodus of the flagship crypto-asset was seen across the top six platforms, including Binance, Coinbase, Kraken, KuCoin, and Bitstamp.
Kraken was hit the highest as it saw a 59% reduction in BTC balance, followed by Coinbase with 33%, Bitfinex and KuCoin with 32% each, Binance with 25%, and lastly, Bitstamp with 23%.
This trend essentially marks a historic drop in overall BTC supply, demonstrating the rising interest in self-custody.
Fundamentally, the less Bitcoin there is on exchanges, the more investors see it as a long-term investment. Expectedly, it also means that there’s less immediate sell pressure.
Earlier this year, Bitcoin core dev, Like Dashjr, lost millions in an exploit after attackers allegedly managed to access his PGP key, raising risks associated with self-custody.
Adam Back, who happens to be one of Bitcoin’s earliest contributors, believes Dashjr was targeted through his home network and had his machines compromised.
Nevertheless, self-custody comes with its own risks. But investors flocking to these products have led centralized exchanges to expand their offerings.
As such, Binance recently announced a new feature – Mirror – based on Binance Custody to enable institutional players to invest and trade using cold custody.
In fact, Binance Venture, the venture capital arm of the CZ-led exchange, also invested in Belgium hardware wallet company, Ngrave.
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