Bitcoin Reduced on Exchanges This Year: A Positive Long-Term Indicator

This year, the number of Bitcoin on exchanges has decreased significantly, with at least 400,000 fewer Bitcoin now compared to the same time last year. This trend is seen as a positive signal for the market, indicating stronger long-term holding behavior among investors and the growing influence of exchange-traded funds (ETFs).

Key Takeaways

Over 403,000 Bitcoin have been removed from exchanges since December 7, 2024.
Users typically transfer Bitcoin to cold storage wallets, indicating a long-term holding mentality.
Bitcoin's supply on exchanges is diminishing as the cryptocurrency is increasingly held by ETFs and public companies.
Institutional ownership is on the rise, leading to a less liquid supply in the market.

Bitcoin peeled off exchanges this year in ‘positive long-term sign’

Main Content

According to market intelligence platform Santiment, there are at least 400,000 fewer Bitcoin on exchanges compared to last year. As of December 7, 2024, more than 403,000 Bitcoin have been withdrawn from exchanges, which constitutes roughly 2% of Bitcoin's total supply. This trend was highlighted in an X post from Santiment on Monday.

Users often transfer their Bitcoin from exchanges to cold storage wallets. This practice generally makes it more challenging to sell the Bitcoin, suggesting that holders may have plans to retain their investments for the long haul.

“With Bitcoin's market value around $90K, we are witnessing a steady movement of its supply away from exchanges,” Santiment noted.

A year ago, there were around 1.8 million Bitcoin on exchanges. Source: Santiment

Bitcoin is Also Flowing into ETFs

While much of the Bitcoin off exchanges may be returning to personal wallets, Giannis Andreou, founder and CEO of crypto mining company Bitmern Mining, stated that exchange-traded funds (ETFs) could also be absorbing some of these coins. He referenced data from BitcoinTreasuries.Net, indicating that ETFs and public companies now hold more Bitcoin collectively than all exchanges combined, following years of outflows.

“Institutional ownership has entered a new stage: less liquid supply, an increase in long-term holders, and a market influenced by regulated entities rather than exchanges,” Andreou added.

ETFs and Public Companies Hold More Bitcoin than Exchanges

Data analytics platform CoinGlass reflects the same trend, reporting that Bitcoin held on exchanges hovered around 2.11 million on November 22, a time when Bitcoin was experiencing a correction and trading near $84,600.

Bitcoin held on exchanges has been steadily falling over the last year. Source: CoinGlass

According to BitBo, ETFs currently hold over 1.5 million Bitcoin, while public companies hold over one million Bitcoin, representing nearly 11% of the total supply combined.

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