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Decreasing Bitcoin reserves on exchanges: Over $10 billion withdrawn this year


The supply of bitcoin (BTC) on crypto exchanges is rapidly diminishing. Since the launch of bitcoin spot Exchange-Traded Funds (ETFs), exchanges have bid farewell to nearly ten billion dollars’ worth of bitcoins. This trend indicates that investors are increasingly opting to hold their bitcoins themselves, potentially signaling positive news for the underlying price.

Substantial BTC Withdrawals Since the bitcoin exchange-traded funds debuted on U.S. markets on January 11, approximately $9.5 billion worth of bitcoin has been withdrawn from exchanges, according to data from crypto analysis platform Glassnode.

When bitcoins are withdrawn from exchanges, they often flow into private wallets. This typically bodes well as it signifies growing confidence among investors.

Storing bitcoins in private wallets is often for the long term. With a private wallet, you possess the associated private keys, giving you full control over your assets. You are not reliant on a third party and can securely hold your bitcoins for an extended period without any worries.

Investors typically send their bitcoin, or any crypto, to exchanges in preparation for selling. Consequently, significant inflows into exchanges are understandably negative for the bitcoin price.

Glassnode also noted that two days ago, on March 27, the third-largest daily withdrawal since the beginning of the year was recorded. In total, over 22,000 BTC was withdrawn from exchanges. At the current bitcoin price, this amounts to approximately $1.54 billion.

The research firm also found that Coinbase had its lowest bitcoin balance since 2018, with over 2.3 million bitcoins.

Bitcoin ETF and Halving on the Horizon While the available bitcoin supply dwindles, demand for bitcoin has skyrocketed. The aforementioned bitcoin spot ETFs reached the remarkable milestone of managing 500,000 bitcoins yesterday. This means that since their launch, the funds have purchased over $35 million worth of the world’s largest crypto.

Next month will also see the much-anticipated Bitcoin halving, which will halve the supply of new bitcoins.

Both on the demand and supply sides, things are looking positive for bitcoin. All things considered, we seem to be gearing up for an impressive bull run. However, the price is influenced by a variety of factors, and nothing is certain in the investment landscape.

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