Bitcoin’s supply on exchanges has dropped below 11% for the first time since 2018, indicating a significant supply shock. This reduction is driven by increased institutional adoption and withdrawals, as major financial institutions prefer third-party custodians over public exchanges. Large outflows from exchanges such as Coinbase reveal a growing trend of investors holding Bitcoin instead of trading it, with the HODLing rate reaching a two-year high. The Exchange Flows to Network Activity Ratio has also fallen, showing subdued exchange deposits despite rising prices. Trust in centralized exchanges has diminished, particularly after the FTX collapse, leading to sustained withdrawals as investors opt for self-custody solutions. This trend suggests investors are becoming more cautious about centralized platforms, resulting in a notable shift in Bitcoin’s supply dynamics as institutions and individuals acquire and hold Bitcoin in private wallets.

Source 🔗