Record Crypto Withdrawals Signal Long-Term Holding
Key Takeaways
- Bitcoin (BTC) and Ethereum (ETH) are being withdrawn from centralized exchanges (CEX) at a record pace.
- The share of BTC on exchanges is down to just 7.1% – the lowest level since November 2018.
- ETH holdings on exchanges have dropped below 4.9% for the first time.
- Over 1.7 million BTC and 15.3 million ETH have been withdrawn from exchanges in the past five years.
- A potential supply shock could be on the horizon if demand increases.
What Does the Decline on Exchanges Mean?
More and more investors are withdrawing their cryptocurrencies from centralized exchanges and storing them themselves – for example, in hardware wallets or other cold storage solutions. This indicates a shift: away from short-term trading and toward long-term value storage.
The reduction in available coins on exchanges decreases market supply. If demand rises, this could lead to a price increase – a classic scenario for a so-called “supply shock.”
The Numbers in Detail
According to on-chain data from Santiment, only 7.1% of the total Bitcoin supply remains on centralized exchanges. This is the lowest level in over six years. For Ethereum, the exchange balance is below 4.9% – a historic low since the cryptocurrency launched in 2015.
The outflows are significant: since 2019, more than 1.7 million BTC and 15.3 million ETH have been withdrawn from exchanges. This points to a clear trend toward self-custody and long-term holding.
What Is a Supply Shock?
A supply shock occurs when the available supply drops significantly while demand remains steady or increases. As a result, prices can rise quickly due to fewer coins being available for sale.
Historically, similar developments have preceded major price increases. However, there are counterarguments: some market watchers believe that large investors (“whales”) are moving their holdings to cold wallets purely for security reasons – without any intention to sell.
You should read that too:
-
Asian Slots – The Best Asia-Themed Online Slot GamesReading time: ~ 3 minutes
-
Christmas Slots – Best Christmas-Themed Slot Machines
Reading time: ~ 3 minutes
-
Easter Slots – Best Easter-Themed Slot Games
Reading time: ~ 3 minutes
-
Food and Drink Slots: The Best Slot Games Inspired by Culinary Delights
Reading time: ~ 3 minutes
-
Space Slots – Best Space-Themed Slots
Reading time: ~ 3 minutes
Bitcoin Surpasses Gold Among U.S. Investors
According to a study by River and The Nakamoto Project, around 50 million Americans now own Bitcoin – significantly more than those who own gold. This demonstrates how strongly BTC has established itself as an asset class.
Bitcoin is increasingly viewed as a digital store of value – similar to gold, but more flexible. The decline in exchange balances may therefore be less about speculation and more about a long-term shift in mindset.
What Does This Mean for You?
If you invest in Bitcoin or Ethereum – or are considering it – it’s important to understand market dynamics. Declining exchange balances could be a sign of an impending supply shortage – with potential price implications.
At the same time, keep in mind that market sentiment can change quickly. A sudden increase in selling interest or new regulatory developments could rapidly alter the current situation.
Our Assessment
The current data points to a structural change in the crypto market. More and more investors are opting for long-term storage instead of short-term trading. This suggests growing confidence in Bitcoin and Ethereum as digital stores of value.
Whether a supply shock actually occurs will largely depend on how demand evolves. If demand increases – for example, through institutional investors or new ETF approvals – supply could become limited.
For you as an investor, this means: monitor on-chain data, stay informed, and make your decisions based on well-researched information.
Sources
- Santiment
- River
- The Nakamoto Project
| Symbol | BTC |
| Coin type | Alt Coin |
| Transaction Speed | Slow |
| Pros |
|
| Cons |
|
| Further practical applications | |
| Price | 110946 |
| 24h % | 4.15 % |
| 7d % | 8.94 % |
| 30d % | 25.45 % |
| 60d % | 31.64 % |
| 1y % | 59.15 % |
| Market Cap | $2,205,802,570,036.00 |
| Max. Supply | 21,000,000.00 |
| Official Links | Website | Whitepaper | Source Code |
| Socials | Reddit | X | Message Board |
Advertising transparency