Bitcoin Exchange Outflows Surge: “Not Your Keys, Not Your Crypto”

By Kevin • July 5, 2022 6:13 pm • Comments

The bear market has taken its toll for many crypto exchanges in the past couple of months which has concerned many investors about whether their existing assets are truly protected.

After all, many are limiting or even completely pausing withdrawals which renders holders unable to access their crypto.

As a result, the month of June showed that Bitcoin exchange outflows has skyrocketed to a level that has never been recorded before.

Trending: RippleX VP Eyes $16 TRILLION Market

What is happening here is that many investors are likely moving their assets off the platforms and into their own wallets which follows the old advice of “not your keys, not your crypto”.

At the same time, the data is also suggesting that demand for the digital asset continues to persist even during the worst of the bear market.

CoinTelegraph reports:

The collapse of the Terra ecosystem, potential insolvency of Celsius and the implosion of Three Arrows Capital have all served as a stark reminder that crypto is intended to be stored in cold storage.

Since March 2020, the number of Bitcoin held on exchanges has declined from 3.15 million to 2.4 million. That’s a total outflow of 750,00 BTC with 142,500 of that total occurring in the past three months.

With platforms like Celsius halting withdrawals and smaller exchanges beginning to put limits on the amount that users can remove, the desire to regain personal control of crypto assets has become a top concern for holders.

This can actually be seen as a positive for prices in the long-term as the likelihood of further capitulation decreases when tokens are locked in cold storage and not readily available to sell on exchanges.

According to the on-chain data, the interest for digital assets is also increasing on the retail side where it is observed that “shrimp” wallets have been accumulating an average of 60,460 BTC per month.

This is accumulation that is happening independent of the institutional accumulation that has also been occurring at the same time.

According to Glassnode, this accumulation rate for the shrimp wallets is apparently the “most aggressive rate in history” which may indicate that this may be a pivotal moment for the entire crypto industry.

At the time of writing, the price of BTC still hovers around the $20k mark with many still debating on whether or not the bottom is in.

CryptoNewsBTC.org reports:

One other encouraging growth amid the worst month in Bitcoin historical past is an rising curiosity from wallets holding lower than 1 BTC, which usually tend to symbolize the retail cohort of the crypto market.

Even with crypto in a bear market, a number of underlying metrics, together with a devoted cohort of crypto hodlers and rising curiosity from smaller retail patrons. recommend that requires the dying of Bitcoin are as soon as once more untimely.

Oh, look, #bitcoin steadiness on exchanges nonetheless dropping…

Some folks perceive that there’ll solely ever be 21 million $BTC. They’re getting their piece of the pie. pic.twitter.com/NSVBJicjZo

— Lark Davis (@TheCryptoLark) July 5, 2022

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