Bitcoin price may be soaring, but the amount of Bitcoin being held on exchanges has plummeted to a new all-time low. Could supply and demand push Bitcoin to new highs once again?
While bull markets commonly cause an influx of funds into crypto exchanges, it appears that exchanges are experiencing a massive outflow of Bitcoin at the same time.
Crypto exchange Coinbase recently experienced a 14,608 BTC outflow from the exchange, valued at $804 million. The massive withdrawal led to the total of Bitcoin held on exchanges drop. It fell to a new all-time low of roughly 2.31 million BTC according to Crypto Quant
Bitcoin has been in huge demand following the massive price surge in 2021. BTC gained nearly 100% this year following a surge to the previous all-time high of $20,000 in late 2020.
The accelerated price action coupled with mass buying of Bitcoin has seen its popularity increase across the globe. The most notable aspect of the Bitcoin supply decreasing is likely due to major institutions and corporations purchasing bitcoin as a reserve asset. Following the lead of MicroStrategy, other major corporations such as Tesla, Square, Mode, and Stone Ridge all added BTC to their reserve assets.
Bitcoin Scarcity Continues
Bitcoin is becoming a store of value for major companies looking to diversify their portfolios. The diversification offers protection against the weakening U.S Dollar. USD is dramatically affected following major quantitative easing due to the Covid-19 Pandemic.
MicroStrategy co-founder Michael Saylor has previously stated that the entire world is looking for a store of value to replace bonds, gold, stocks, ETFs, real estate, and cash. “it is inevitable that more & more successful investors like Howard Marks are going to discover, research, & embrace” he previously tweeted.
The decrease in BTC held on exchanges is a clear sign that mass accumulation between retail investors, larger whales, and corporate entities are buying up bitcoin’s limited supply. If the decline of BTC on exchanges continues to drop, BTC’s future price could likely soar as scarcity sets in.
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