Only 5.8% of BTC in Circulation Sits on Exchanges But Bitcoin Price Struggles: Santiment

Crypto analytics platform Santiment has found that bitcoin (BTC) supply on exchanges has plummeted to its lowest level in roughly six years.

On-chain data analyzed by the firm shows that only 5.8% of the total BTC supply sits on trading platforms, and this level was last seen on December 17, 2017.

Bitcoin Supply on Exchanges Continues to Decline

The low level of BTC supply on exchanges shows that the asset’s holders have not regained their confidence and trust in centralized platforms. They still prefer cold storage options and self-custodial methods.

The self-custodial trend heightened toward the end of last year following the collapse of one of the largest cryptocurrency exchanges. FTX imploded in November and filed for bankruptcy, dragging other crypto firms with it and leaving users and their assets in limbo. This led to increased BTC outflows from major exchanges, including the world’s largest platform, Binance.

Although investors began to opt for self-custodial methods in the first quarter of 2022, the catastrophic events of that year increased the outflows from exchanges. The amount of BTC on such platforms dipped to 7% between Q4 2022 and Q1 2023. By May, the supply had plunged to 6%, currently around 5.8%. This shows that the current level is fueled by fear, uncertainty, and doubt (FUD) as to which exchange is next to meet its demise.

👋 Just 5.8% of #Bitcoin is currently sitting on exchanges, which is officially the lowest level #crypto‘s top market cap asset has seen since December 17, 2017. We are also continuing to see reasonable amounts of $BTC whale transactions (57.4K per week). pic.twitter.com/nNnz2JDJyb

— Santiment (@santimentfeed) August 24, 2023

Significant BTC Whale Activity Continues

While the BTC supply on exchanges is declining, Santiment noticed continuous significant activity in the asset’s whale transactions. According to the platform, bitcoin transactions surpassing $100,000 in value are averaging 57,400 weekly. These transactions have continued despite BTC’s recent plunge to the $25,000 level last week.

Santiment’s report aligns with a recent on-chain analysis, which disclosed that some whales and sharks holding 10 to 10,000 BTC had accumulated more than 11,600 BTC worth roughly $308 million between August 17 and August 24. As of yesterday, around 156,660 wallets were holding 10 to 10,000 BTC, substantiating the claims of reasonable whale activity.

The BTC whale and shark accumulation spree spiked after the world’s largest asset manager, BlackRock, filed an application with the U.S. Securities and Exchange Commission for a spot Bitcoin exchange-traded fund in June, spurring more submissions from other traditional finance giants.