According to the most current Glassnode data, dealers and investors are actively removing a large amount of Bitcoin from exchanges. According to the project, March was the fourth month in a row that exchanges lost over 100,000 BTC. Since the end of 2021, traders and investors have been actively moving funds away from exchanges as trust in centralised exchanges has eroded and the market has shifted into an accumulation phase.
Bitcoin has already dropped about 40% of its value since hitting an all-time high at the beginning of January. According to reports, Bitcoin whales began accumulating new coins in their wallets at the time by purchasing new assets on centralised exchanges and moving them to noncustodial wallets. With increased accumulation and removal of supply from trading platforms, Bitcoin may experience a supply shock in the future if strong demand from retail or institutional traders emerges.
Another factor driving massive exchange outflows is a series of account limits and bans on major exchanges like Kraken and even Binance. Users should shift their assets out of exchange-controlled wallets, according to Kraken’s CEO, to prevent trading or withdrawal restrictions that the exchange management team cannot control due to the regulators in the countries where they are based.
While major investors prefer wallets to trading platforms, smaller market players are flocking to decentralised trading platforms to escape third-party sanctions and laws.
Read more: New record for non-zero BTC addresses, hits all-time high of 40 million
