Bitcoin balance on stock exchanges at its lowest point in almost 2 years, what does this mean?

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The number of bitcoin in wallets of crypto exchanges is at its lowest point since November 2018. This is shown by data from blockchain analysis agency Glassnode. But what does this data actually say?

Less and less bitcoin on exchanges
On 11 February this year, the number of bitcoins on stock exchanges was at its highest ever level, when exchanges together held 2.97 million bitcoins. Then the road started down. Since then, the number of bitcoins on stock exchanges has fallen by more than 13% to 2.57 million bitcoins, the lowest point in almost two years.

Investors prefer to hold on to bitcoins themselves

The first explanation is that bitcoin investors prefer to hold their own bitcoins. This can be done safely, for example, with a hardware wallet, a physical device with which you can manage your private keys.

The assumption is that investors have more confidence in the future of bitcoin, and that they do not see any benefit in constantly trading on cryptocurrency exchanges.

Or is it because of DeFi?
What can also help is that more and more bitcoins are fixed on the bitcoin blockchain and released as tokens on other blockchains. According to data from Dune Analytics there are now 92,583 bitcoins Crypto Investor packaged as ERC-20 tokens. This is a tenfold increase in the number of tokened bitcoins in July.

The graph below shows the rapid increase in the number of bitcoins packaged as ERC-20 tokens. Lord and master is still wrapped bitcoin (wBTC), which we wrote about earlier in this article.

The number of bitcoins on the Ren blockchain (renBTC) has also increased from 1,161 renBTC to 23,200 renBTC in just under three months.

BitMEX caused further outflow
The two reasons in this article are assumptions, it always remains guesswork why the number of bitcoins on stock exchanges continues to fall. However, many bitcoins have withdrawn from the BitMEX wallet in recent days. According to Decrypt, investors have withdrawn a total of more than 22,300 bitcoins, one of the largest ‚exchange‘ runs in the history of. bitcoin.