Bitcoin: Exchange Reserves at 6-Year Lows

2024 Brings Significant Changes as Exchanges Lose Market Share
The number of Bitcoin held in reserves hasn't been this low since 2018.

A Shift in Market Trends

The crypto market in 2024 is undergoing a series of changes. In previous cycles, during Bitcoin bull markets, it was common to see inflows into exchange reserves.

As Bitcoin prices rose, investors deposited their assets into major exchanges to liquidate them when needed. However, this trend appears to have shifted with the introduction of spot ETFs in the market.

Since February, the peak month for reserves, the number of Bitcoin held on exchanges has been steadily declining. Compared to the 2.7 million BTC in February, outflows have exceeded 20%, bringing current reserves to 2.25 million.

This data is even more striking when compared to March 2020, during the pandemic-induced panic, when reserves exceeded 3.2 million BTC. Today’s numbers represent a decline of nearly 50% since then.

Declining Reserves for Miners, Growth for ETFs and Private Wallets

In addition to exchange outflows, Bitcoin held by miners is also steadily decreasing. In 2024, following Bitcoin’s significant price increase, over 30,000 BTC have been liquidated by miners, highlighting a downward trend in their reserves, albeit with less impact.

Conversely, the trend is entirely opposite when observing spot Bitcoin ETF inflows, which have dominated the sector in 2024.

With a net inflow close to 400,000 BTC, ETFs are continuously increasing their reserves. Currently, these products manage over 1.1 million BTC, equivalent to 5.5% of the circulating supply, in a trend that shows no signs of slowing down.

By Gue22 🚀⚡
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