Investors Pull BTC From CEXs As Bitcoin Remains On Lowest Levels

Investors pull BTC from centralized exchanges as the ones held dropped to 2.4 million in June which is the lowest level since August 2018 so let’s read more in today’s latest Bitcoin news.

The number of BTC held on centralized exchanges dropped to the lowest levels since 2018 as the data from Glassnode shows. The investors pull BTC from the exchanges due to fears of contagion after the recent issues with Babel Finance and Celsius. The charts all show a steep decline in BTC on the exchanges when Celsius announced to be suspending withdrawals.

The volume of BTC on exchanges hit 2.4 million in 2018 and dropped below the milestone until this June. It hit a peak in May 2020 of 3.1 million and has been in a downtrend ever since. Investors saw cryptos leaving exchanges as a bullish indicator historically and as the balance of an asset on exchange drops, so does the liquidity and the ability to be traded. Most think that when BTC outflows increase, it is due to investors moving the coins into cold wallets and holding in the long term.

In light of the concerns around exchanges, YouTuber Guy from CoinBureau noted:

“Now is more important than ever to stress the importance of *self custody*. Say it with me: Not Your Keys…

You can’t *verify* the current solvency of all these CeFi lenders. Holding funds with them relies on trust. But, crypto is meant to be *trustless*. You don’t need assurances, you need to hold your own coins.”

This topic was discussed at length in crypto spaces and it seems that the non-custodial nature of centralized exchanges was challenged analysts argue the condition from the Terra collapse might not be over yet. The host of the MIM podcast Brad Mills noted:

“I learned “Not Your Keys Not Your Coins” & “Don’t Trust, Verify” in the MtGox collapse. I’m still here.

You’re still early, this bear market is a reset.”

Investors in Celsius are still not able to access their funds over two weeks after withdrawals are paused. Holding BTC in a wallet gives investors autonomy over the assets while depositing crypto to exchanges is similar to putting it in a bank without bailout protection. With the BTC levels on exchanges below 2.4 million BTC and 30 million investors using only Binance, the asset scarcity is rising. If the BTC demand continues to grow while exchange balances decline, it will create a robust setup from the upward price move.