Bitcoin (BTC) balance on exchanges drops to two-year lows
- Bitcoin balance on some of the leading exchanges is rapidly dropping, according to recent data.
- There are many reasons why this may be the case, including the new-found appreciation of BTC.
- With only some exchanges seeing such reductions, many believe that they are losing the clients' trust.
Bitcoin (BTC) supply held by major exchanges has fallen to lows that were not seen for the past two years. The last time that BTC balance on major trading platforms was this low was back in 2018, according to data collected on October 20th.
People are realizing the value of Bitcoin
The crypto industry has grown rapidly over 2020, and for a variety of reasons. The existing crypto community has been buying it with the intention of HODLing, ever since BTC went through its third halving, expecting the prices to skyrocket.
Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.
Then, there was the COVID-19 pandemic, which caused the global economic meltdown due to pure fear of what it can do to various industries. In the end, the world started to realize something that the crypto industry has known for years — the BTC is the only asset that offers a sound monetary policy.
At least, that is what the co-founder of Nexo, Antoni Trenchev, recently noted. He said that BTC is the best-performing asset of the decade, and that the world has started to realize this.
He further added that the community is resorting to self-custody solutions, which include platforms such as Nexo itself. Such platforms allow for tax-efficient borrowing against the assets that users already own.
There is no need to sell in order to earn, and all the popularity has sparked more crypto discussions than ever.
BitMEX and Bitfinex might be losing the users’ trust
The co-founder of Celsius, Alex Mashinsky, expects that this state of things will continue, unless the exchanges change the terms of the deals they are offering in order to attract the users back to their platforms.
Not all exchanges are impacted equally, of course. Platforms like Binance and Coinbase, which offer good terms for their users, have kept their funds. Meanwhile, the likes of Bitfinex and BitMEX have seen severe reductions in the assets they hold.
The rise of the DeFi sector undoubtedly contributed as well, and so did the institutional investors’ growing interest. They used companies like Grayscale and Microstrategy to accumulate vast amounts of BTC throughout the year. In any event, some of the exchanges seem to be losing their users’ trust, although not all, as mentioned.