Bitcoin exchange holdings decline to multi-year low: report

Bitcoin reserves on centralized crypto exchanges such as Binance and Coinbase have fallen to their lowest levels in recent years, strengthening the cryptocurrency’s upward trend.

CryptoQuant data confirms that investors have withdrawn more than 171,000 Bitcoins (BTC) from major crypto exchanges since Donald Trump’s victory in the US presidential election. Mass pullbacks shorten the available supply for sales and often signal a long-term investment plan adopted by shareholders.

While data shows surprising outflows from Bitcoin exchanges after President Trump’s victory, this trend extends into 2021. Bitcoin foreign exchange reserves have steadily decreased since the crypto’s previous peak, a sign of strong belief in BTC despite market declines in 2022 and 2023.

BTC foreign exchange reserves reached the lowest levels in recent years | Source: CryptoQuant

As of October 2021, exchange assets were recorded to be 3.2 million BTC. According to CryptoQuant, this level had dropped to 2.46 million tokens at the time of writing. Glassnode replicated CryptoQuant’s data, showing an increase in short-term dormant BTC. The platform’s measure of illiquid supply, which tracks long-term investor holdings, has increased by 185,000 Bitcoins over the past 30 days.

Approximately 75% of BTC’s current supply, approximately 14.8 million coins, has been inactive since the beginning of November. This pattern could extend into 2025 as Trump implements crypto-friendly policies and BTC adoption skyrockets.

The world’s top cryptocurrency rose to $99,600 weeks after President Trump’s re-election. Bitcoin and the broader digital asset market corrected price gains on December 3 as political turmoil in South Korea and profits diverted to altcoins like Ripple (XRP).

However, experts such as Fundstrat Capital CIO Thomas Lee predict that a supply shock will come before the end of 2024 and the price will rise above $100,000.